Q.An agent places insurance for ₹ 4,00,000 on life of a person. The premium is to be paid annually at the rate of ₹ 35 per thousand per annum. Find the agent’s commission at 15% on the premium.

Premium $= \dfrac{4{,}00{,}000}{1000}\times 35 = ₹14{,}000$; commission $= 15\% \times 14{,}000 = ₹2{,}100$.

Step 1 — Annual premium. The premium is ₹35 per thousand of the sum assured. The sum assured is ₹$4{,}00{,}000$, which is $\dfrac{4{,}00{,}000}{1000} = 400$ thousands.

$\text{Premium} = 400 \times 35 = ₹14{,}000$

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