Janice purchased a living room set for $1,000 and insured this furniture on an actual cash value basis.Two years later the living room set was destroyed by a covered peril.At the time of loss,the property had depreciated in value by 25 percent.The replacement cost of the furniture at the time of loss was $1,200.Assuming no deductible,how much will Janice receive from her insurer?

Question

Quizplus · Accepted Answer

The actual cash value is calculated by subtracting depreciation from the replacement cost or original value. The furniture depreciated by 25% of its original $1,000 value, which is $250. Therefore, $1,000 - $250 = $750. However, there seems to be a mistake in my explanation as none of the provided options match the correct calculation based on the given information. Given the options, the closest to the concept of actual cash value after depreciation would be $900, but this does not align with the standard calculation method. Please review the question and options for any discrepancies.

Janice Purchased a Living Room Set for $1,000 and Insured