PSAT Math Multiple-Choice Question 308: Answer and Explanation

Question: 308

An automotive insurer computes the charge for an insurance policy by starting with a fixed fee for administrative expenses and then adding a percentage of the value of the car, v. If the total price for an automobile policy is given by the function T = 0.02v + 25, then the value 0.02 best represents which of the following?

• A. The fee for the administrative expenses
• B. The value of the car
• C. The total price of the policy
• D. The percentage of the value of the car

Correct Answer: D

Explanation:

D

Difficulty: Easy

Getting to the Answer: The total insurance bill consists of a flat fee and a percentage of the value of the car. The administrative fee does not depend on the value of the car and therefore should not be multiplied by v. This means that 25 is the administrative fee. The other expression in the equation, 0.02v, represents the percentage of the value of the car times the car's value (which the question tells you is v). -Therefore, 0.02 must represent the value of the car as a percentage, which is (D).