If a house valued at £120,000 has a rate of 0.6 percent, what would the premium be?

To calculate the insurance premium for the house valued at £120,000 with a rate of 0.6 percent, you would use the formula:

Premium = Value of the house x Rate

This means you would need to multiply the house's value (£120,000) by the rate expressed as a decimal (0.6% = 0.006).

So the calculation would be:

Premium = £120,000 x 0.006 = £720.

Therefore, the premium amounts to £720, which corresponds to the correct answer. Understanding how to convert percentages to decimals and apply them in a basic multiplication context is key in determining insurance premiums.