A contractor's workers compensation policy has a $500 deductible per claim. Three claims occur in one year: $3,200, $1,800, and $8,500. What is the total amount the contractor pays in deductibles?
Correct Answer
C) $1,500
Three claims × $500 deductible per claim = $1,500 total deductibles paid by the contractor.
Why This Is the Correct Answer
The deductible applies per claim, not per dollar amount of the claim. With three claims and a $500 deductible each: 3 × $500 = $1,500. The actual size of each claim is irrelevant to the deductible calculation — each claim triggers exactly one $500 deductible.
Why the Other Options Are Wrong
Option A: $2,500
$2,500 likely results from multiplying $500 by 5 (perhaps 5 as a misread number) or from incorrectly adding partial claim amounts. There is no basis in the problem for a $2,500 result.
Option B: $1,000
$1,000 would result if a student counted only 2 of the 3 claims, perhaps overlooking the third claim or misreading the problem as having only 2 claims.
Option D: $2,000
$2,000 would result from multiplying $500 by 4 — a common off-by-one error or from confusing the number of claims with some other figure in the problem.
Memory Technique
Deductible = toll booth fee: every claim pays the same $500 toll, regardless of how big the 'vehicle' (claim) is. Three cars, three tolls: 3 × $500 = $1,500.
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