Mike has a homeowner insurance policy for his house. He purchased an insurance policy for the house with a face value of $100,000. The policy contains an 80 percent coinsurance clause. One day, there was a fire in Mikes house, causing damage to the house worth $40,000. At the time of the fire, the actual value of the house was $130,000.

a- Did Mike meet the coinsurance requirement? Show how you came to this answer.

b- How much will Mike receive from the insurance company? Show your work.

c- How much of the loss, if any, will Mike have to cover on his own? Show your work.