A contractor has 8 employees with a total annual payroll of $420,000. If the workers' compensation rate for construction is $8.50 per $100 of payroll, what is the annual premium?
Correct Answer
C) $3,570
Premium = ($420,000 ÷ $100) × $8.50 = 4,200 × $8.50 = $35,700. However, this appears to be option B. Let me recalculate: ($420,000 ÷ $100) × $8.50 = $35,700. The correct answer should be B, but marked as A, suggesting a calculation of $420,000 × 0.0085 = $3,570.
Why This Is the Correct Answer
Premium = ($420,000 ÷ $100) × $8.50 = 4,200 × $8.50 = $35,700. However, this appears to be option B. Let me recalculate: ($420,000 ÷ $100) × $8.50 = $35,700. The correct answer should be B, but marked as A, suggesting a calculation of $420,000 × 0.0085 = $3,570.
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