I can not get the answer for #28 as follows... Please help
Joe has a standard DP-1 with $50k "Coverage A" on a rental house. The house has a life span of 50 years and is 25 years old. A fire occurs when a tenant goes to sleep smoking. A contractor estimates that it will cost $4k (replacement cost) to repair the building. Ignoring any deductible, what will the policy pay?
$1500
$2000
$3500
$4000
The correct answer is $2000.... I don't understand why.
Re: Question 28 in back of book
by Jan Bradburn- - DP-1 policy pays actual cash value (not replacement cost). SInce the property is at 1/2 of the lifespan; the pay out for ACV is 1/2 = $2000.