Question

According to the records of an insurance company, the payouts on insurance cases in February were $12,400. In March, the payouts increased by 8.5% and then dropped by 5% in April. Find the amount of the payouts in April.​

Answer 1

Let the amount of payouts in March be M.

From the problem, we know that the payouts in March increased by 8.5%, which means:

M = 12,400 + 0.085(12,400)

M = 12,400 + 1,054

M = 13,454

Next, we know that the payouts in April dropped by 5%, which means:

A = M - 0.05M

A = 0.95M

A = 0.95(13,454)

A = 12,781.3

Therefore, the amount of the payouts in April was $12,781.3.