Question

"Many insurance companies will replace a vehicle if an estimated repair exceeds 80% of the 'blue-book' value of the vehicle. Michelle's insurance company paid $6900 for repairs to her car after an accident. What can be concluded about the blue-book value of the car? The blue-book value is ___."

Answer 1

The blue-book value of Michelle's car is at least $8625 because the repair cost paid by the insurance company ($6900) is less than 80% of the car's value; otherwise, the car would have been replaced instead of repaired.

Step-by-step explanation:

Since many insurance companies will replace a vehicle if the estimated repair costs exceed 80% of the vehicle's 'blue-book' value, and Michelle's insurance company paid $6900 for repairs to her car, we can set up the following equation where x represents the blue-book value of the car:

0.80x = $6900

To find the blue-book value (x), divide both sides of the equation by 0.80:

x = $6900 / 0.80

x = $8625

Thus, the blue-book value of the car is at least $8625, because if it were lower, the insurance company would have chosen to replace the vehicle instead of paying for the repairs.