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Real-Life Math -- Solution

For the free coverage, the company would have to pay:

$0.40 per pound x 150 pounds = $60

If the customer wants to pay for a higher level of coverage, they could take out a premium based on the item's actual value. If the customer had paid for this coverage at $0.90 per each $100 of stated value and declared that the desk was worth $500, how much would the customer have paid for the coverage?

$0.90 x 5 = $4.50

And the company would owe the client $500 for the stated value of the desk.