What is the homewoners net gain and loss

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The owner of a house worth $180,000 purchases an insurance policy at the beginning of the year for a price of $1,000. The deductible on the policy is $5,000. If after 6 months the homeowner experiences a casualty loss valued at $45,000, what is the homewoner's net gain/loss? Assume an opportunity cost of capital of 4.0% annually. Please show detail calculations.

Reference no: EM131065095

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