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An insurance policy covering flood damage to stock pays 80% of the costs for the first $1,000 and all of the cost thereafter up to a total of $5,000. Following a claim, the claimant had to pay an additional $1,000 to replace damaged stock. How much was the stock worth?
Explanation:
If the claimant had to pay an additional $1,000, then the insurance company must have paid out 80% of $1,000 plus $5,000.
This means the insurance company paid out $5,800.
The claimant paid an additional $1,000 making the stock worth a total of $6,800.
Option D is the correct answer.
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