Math Geeks!! Assistance needed!!
June 7, 2012 3:48 PM Subscribe
How should a surcharge be calculated?
posted by elf27 to work & money (11 answers total)
This is a real situation (I'm not looking for help with math homework!)
Someone is paying $1,253 for an insurance policy. He had an accident, and the insurance company adds a 30% surcharge.
The new premium is now $1,784. By my calculation, that is over 40%. By my numbers, the premium should be $1,629.
1,253 x 1.3 = 1,629 (simple, no?)
Here is the explanation offered by someone from the company:
Unfortunately, you can't figure out the surcharge amount by adding 30% to the new premium. The only way to figure out the surcharge amount is to take the percentage change between the old premium and the new premium, which Bob mentioned below. You have to back into the number to figure out what was the percentage of the old premium..
$1253 - $1784 = $-531
$-531 / $1784 = -29.7% (this is saying there was a 30% decrease in premium between the $1784 and the $1253)
So the question is.. what should constitute a 30% surcharge on $1,253?