Question

Brandie is trying to decide between two cell phones. One is free with a 2-year contract, but she will have to pay the sales tax of 8% on the original price$399 and the monthly charge is $10 more than she currently pays. The other is on sale $199 plus 8% sales tax. The monthly charge is the same as she currently pays. Over the 2-year contract period, which phone will be the lower cost and by how much?

Answer 1

Answer: The second plan is cheaper by $57.

For the first plan, Brandie will page $31.92 in tax, plus $10 per month of the 24 month contract of $240. The total new charge is $271.92.

For the second plan, Brandie will simply pay $214.92 (the cost of the phone including tax.

The second plan is obviously lower. Subtracting them gives us the difference.

271.92 - 214.92 = 57