Without including other expenses and the benefit of the insurance company, the premium has to meet this proportion:
1/400 = premim / value of the car
=> 1/400 = premum / $16,000
=> premium = $16,000 * (1/400) = $ 40
As already said this is witout taking into consideration the other expenses of the insurance company and their margin.
Answer: option B. $40.
