I need more understanding if someone could help me out.  Why is the payable $3,500.00?  Why is it not $3,150.00?  I am not understanding where the deductible is showing.  I did my equation like this.

 $5,000.00 - $500.00 deductible = $4,500.00 x 7 divided by 10= $3,150.00 is payable. 

An insured has an HO-3, no endorsements, with following limits: A - $70,000, B - $7,000, C - $35,000,D- $14,000. The policy has a $500 deductible ($500 deductible for windstorm/hurricane).

What is the amount payable (if any) when:" A windstorm caused extensive damage to the roof of the insured's residence, requiring replacement of a portion. Cost to replace was $5,000. Taking depreciation into account, the actual cash value was $3,000. At the time of the loss, the replacement value of the dwelling was $125,000"?

$______ is payable. $5,000 less $500 deductible = $4,500,but for full replacement cost settlement, the insured needed not less than 80% of the full replacement value as the coverage A limit ($125,000 x 80% = $100,000).