Question

g Miller Brooks is planning to purchase a new mobile phone plan. However, she is not sure about which plan to select. The regular plan charges a fixed amount of $55 per month for 1,000 minutes plus $0.33 per minute over 1,000 minutes. The platinum plan charges a fixed amount of $100 per month. for 1,200 minutes plus $0.25 per minute over 1,200 minutes. Answer the following questions: (2 points each) 1) Miller is expecting to use her phone for 21 hours per month. Which plan should she select

Answer 1

Answer:

The platinum plan should be selected.

Explanation:

This can be determined using the following 4 steps:

Step 1: Calculation of the total expected minutes in a month

Total number of expected minutes in a month = Number of hours Miller is expected to use her phone per month * Numbe of minutes in one hour = 21 hour * 60 minutes = 1,260 minute

Step 2: Calculation of the expected cost of regular plan

Expected fixed cost of 1,000 minutes per months = $55

Expected cost of  minutes over 1,000 minutes = (Total number of expected minutes in a month - 1,000 minutes) * Cost per minute = (1,260 - 1,000) * $0.33 = 260 * $0.33 = $85.80

Expected cost of regular plan = Expected fixed cost of 1,000 minutes per months + Expected cost of  minutes over 1,000 minutes = $55 + $85.80 = $140.80

Step 3: Calculation of the expected cost of platinum plan

Expected fixed cost of 1,200 minutes per months = $100

Expected cost of  minutes over 1,200 minutes = (Total number of expected minutes in a month - 1,200 minutes) * Cost per minute = (1,260 - 1,200) * $0.25 = 60 * $0.25 = $15

Expected cost of platinum plan = Expected fixed cost of 1,200 minutes per months + Expected cost of  minutes over 1,200 minutes = $100 + $15 = $115

Step 4: Decision

Expected cost of regular plan = $140.80

Expected cost of platinum plan = $115

Since the expected cost of platinum plan of $115 is lower than the expected cost of regular plan of $140.80, the platinum plan should be selected.