What is the total workers' compensation premium before the 5% safety-program discount?

What is the total workers' compensation premium before the 5% safety-program discount?

• A. $600
• B. $677
• C. $700
• D. $720

Answer: (B)

The key idea is that the 5% safety-program discount reduces the premium, so the amount after the discount is 95% of the original pre-discount premium. To find the pre-discount amount, divide the discounted total by 0.95. In this problem, the discounted premium is $643.15. Dividing by 0.95 gives 643.15 ÷ 0.95 = $677. That matches the required pre-discount total. As a quick check: take the pre-discount amount of $677 and apply the 5% discount. 677 × 0.95 = $643.15, which is the discounted amount given. The other options, when discounted by 5%, would yield different amounts (for example, 600 → 570, 700 → 665, 720 → 684), so they wouldn’t fit the scenario. Therefore, the total workers' compensation premium before the discount is $677.

The key idea is that the 5% safety-program discount reduces the premium, so the amount after the discount is 95% of the original pre-discount premium. To find the pre-discount amount, divide the discounted total by 0.95.

In this problem, the discounted premium is $643.15. Dividing by 0.95 gives 643.15 ÷ 0.95 = $677. That matches the required pre-discount total.

As a quick check: take the pre-discount amount of $677 and apply the 5% discount. 677 × 0.95 = $643.15, which is the discounted amount given. The other options, when discounted by 5%, would yield different amounts (for example, 600 → 570, 700 → 665, 720 → 684), so they wouldn’t fit the scenario. Therefore, the total workers' compensation premium before the discount is $677.