Q.A shopkeeper insures his stock worth ₹1,50,000 for 80% of its value. If the premium rate is 2%, find

The sum insured is 80% of the property value; the premium is charged on that sum insured.

Sum insured $=0.8\times150000=120000$; premium $=2\%$ of $120000=2400$.

1. Sum insured — the stock is insured for a fraction $k=80\%$ of its value $V=₹1{,}50{,}000$:

   $\text{Sum insured}=k\times V=\frac{80}{100}\times150000=₹1{,}20{,}000.$

2. Premium — charged on the sum insured (not the full value):

   $\text{Premium}=\frac{2}{100}\times120000=₹2{,}400.$

   Check (independent verification): $1\%$ of ₹1,20,000 is ₹1,200, so $2\%$ is $2\times1200=₹2{,}400$ — consistent. (Had the premium wrongly been charged on the full ₹1,50,000 it would be ₹3,000, which the question does not ask for.)
   ✓Final answer

   (i) Sum insured $=$ ₹1,20,000; (ii) Premium $=$ ₹2,400

Charging the $2\%$ premium on the full property value ₹1,50,000 instead of on the sum insured ₹1,20,000. The premium is always on the amount actually insured.