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The city of Dreaming has a population of 60,000 and only one home insurance provider, Endless Insurance. The city’s welfare department calculated that a homeowner earning the city’s median income of $60,000 a year could afford Endless Insurance’s median-priced home insurance coverage, which costs $7,000. The welfare department based this calculation on a 12 percent annual interest rate and on the assumption that Dreaming’s homeowners could only afford to allocate up to five percent of their respective incomes towards insurance.
Which of the following corrections of a figure mentioned in the above passage, if it were the only necessary correction, would lead to a new calculation indicating that even incomes below the median income would permit homeowners to afford Endless Insurance’s median-priced home insurance coverage?
A. The total population of the city of Dreaming is 57, 000.
B. The annual payment rate on Endless Insurance’s home insurance policies is 10 percent.
C. The median-priced home insurance offered by Endless Insurance costs $8,000.
D. The median income in the city of Dreaming was $55,000.
E. Dreaming’s homeowners can afford to allocate only four percent of their income towards insurance.
The OA will be automatically revealed on Monday 18th of May 2026 07:00:34 PM Pacific Time Zone
Which of the following corrections of a figure mentioned in the above passage, if it were the only necessary correction, would lead to a new calculation indicating that even incomes below the median income would permit homeowners to afford Endless Insurance’s median-priced home insurance coverage?
A. The total population of the city of Dreaming is 57, 000.
B. The annual payment rate on Endless Insurance’s home insurance policies is 10 percent.
C. The median-priced home insurance offered by Endless Insurance costs $8,000.
D. The median income in the city of Dreaming was $55,000.
E. Dreaming’s homeowners can afford to allocate only four percent of their income towards insurance.
The OA will be automatically revealed on Monday 18th of May 2026 07:00:34 PM Pacific Time Zone
17 May 2026, 22:55
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population- 60000
only one insurance home provider.
homeowners earning median income of 60000 a year could afford insurances median priced home insurance coverage, which costs 7000.
calculation based on- 12% annual interest rate and on assumption that homeowners could only afford to allocate up to 5% of their respective income towards insurance.
A. The total population of the city of Dreaming is 57, 000.
cant challenge the premise here. reject.
B .The annual payment rate on Endless Insurance’s home insurance policies is 10 percent.
this changes the calculation completely. if the annual rate dropped by 2% then it gives other people to consider the premium. because they dont have to save more for insurance. so this make sense. keep.
C. The median-priced home insurance offered by Endless Insurance costs $8,000.
this rather makes claim more weaking based on the info given, reject.
D. The median income in the city of Dreaming was $55,000.
passage already says its 60000. reject.
E. Dreaming’s homeowners can afford to allocate only four percent of their income towards insurance.
this rather weakens the claim. reject. passage already says upto 5% and now this choice is saying up to 4%. its decreasing the % factors and the more it does that the more difficult it gets to cover those below median income. reject.
only one insurance home provider.
homeowners earning median income of 60000 a year could afford insurances median priced home insurance coverage, which costs 7000.
calculation based on- 12% annual interest rate and on assumption that homeowners could only afford to allocate up to 5% of their respective income towards insurance.
A. The total population of the city of Dreaming is 57, 000.
cant challenge the premise here. reject.
B .The annual payment rate on Endless Insurance’s home insurance policies is 10 percent.
this changes the calculation completely. if the annual rate dropped by 2% then it gives other people to consider the premium. because they dont have to save more for insurance. so this make sense. keep.
C. The median-priced home insurance offered by Endless Insurance costs $8,000.
this rather makes claim more weaking based on the info given, reject.
D. The median income in the city of Dreaming was $55,000.
passage already says its 60000. reject.
E. Dreaming’s homeowners can afford to allocate only four percent of their income towards insurance.
this rather weakens the claim. reject. passage already says upto 5% and now this choice is saying up to 4%. its decreasing the % factors and the more it does that the more difficult it gets to cover those below median income. reject.
ExpertsGlobal5
18 May 2026, 00:13
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Interesting question. Here is my attempt:
Simply list out the numbers here since the question stem is really asking about numbers.
We have, 12% annual payment rate + 5% allocation based on median income a quick calculation gives 7,200+300 =7,500 this is above the median insurance cost of 7,000. Now we understand how the calculation came to be. So variables here are a) annual payment rate b) median income, c) income allocation , and d) median insurance policy price tag
Then we extract what the stem is actually asking: what would increase the affordability. ---> so that ppl earning less could afford the policy.
We take this to test each answer choices.
A - Population is not a variable we have identified. reject
B - Lowering variable a), surely this will enhance the affordability of the insurance policy (namely, lower the price), keep
C - This hits the variable d). but it is the exact opposite of what we want. If the price tag is increased, keeping other variables unchanged, less ppl will be able to afford it, less affordability. reject.
D - This hits the variable b). but similar to C, this cast the opposite effect. If ppl were earning less, holding other variables unchanged, they'd have less absolute amount to spend on insurance policy, less affordability. reject.
E - This hits the variable c). Same situation as C and D. Allocating less income based on the exact same level for all other variables means less absolute amount towards insurance policy, less affordability. reject.
Simply list out the numbers here since the question stem is really asking about numbers.
We have, 12% annual payment rate + 5% allocation based on median income a quick calculation gives 7,200+300 =7,500 this is above the median insurance cost of 7,000. Now we understand how the calculation came to be. So variables here are a) annual payment rate b) median income, c) income allocation , and d) median insurance policy price tag
Then we extract what the stem is actually asking: what would increase the affordability. ---> so that ppl earning less could afford the policy.
We take this to test each answer choices.
A - Population is not a variable we have identified. reject
B - Lowering variable a), surely this will enhance the affordability of the insurance policy (namely, lower the price), keep
C - This hits the variable d). but it is the exact opposite of what we want. If the price tag is increased, keeping other variables unchanged, less ppl will be able to afford it, less affordability. reject.
D - This hits the variable b). but similar to C, this cast the opposite effect. If ppl were earning less, holding other variables unchanged, they'd have less absolute amount to spend on insurance policy, less affordability. reject.
E - This hits the variable c). Same situation as C and D. Allocating less income based on the exact same level for all other variables means less absolute amount towards insurance policy, less affordability. reject.
