Chapter 10 Financial Planning Exercise 3 Payout on homeowner's insurance policy

Ivy Gordon's home in Charleston was recently gutted in a fire. Her living and dining rooms were destroyed completely, and the damaged personal property had a replacement price of $34,000. The average age of the damaged personal property was 10 years, and its useful life was estimated to be 20 years. What is the maximum amount the insurance company would pay Ivy, assuming that it reimburses losses on an actual cash-value basis and has a $500 deductible? Assume that the total coverage requirement is met. Do not round intermediate calculations. Round the answer to the nearest cent.