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7. In anticipation of a holiday a merchant makes an outlay of $50, which will be a total loss in case of rain, but which will bring him a clear profit of $150 above the outlay if the day is pleasant. To insure against loss he takes out an insurance policy against rain for a certain sum of money for which he has to pay a certain percentage. He then finds that whether the day be rainy or pleasant he will make $80 clear. What is the amount of the policy, and what rate did the company charge him?
MASSACHUSETTS INSTITUTE OF TECHNOLOGY
ALGEBRA A
Time: Two Hours
1. Simplify
