Janice purchased a living room set for $1,000 and insured this furnitu

Janice purchased a living room set for $1,000 and insured this furniture on an actual cash value basis.

Two years later the living room set was destroyed by a covered peril. At the time of loss, the property had depreciated in value by 25 percent. The replacement cost of the furniture at the time of loss was $1,200. Assuming no deductible, how much will Janice receive from her insurer?
A) $900
B) $950
C) $1,000
D) $1,200

ANSWER

Answer: A