You are considering a cell phone package that needs no money down but has monthly payments of $18.50 for 36 months.The monthly interest rate for you is 1% per month.Alternatively, you can buy the cell phone outright for one fixed price.At which of the following prices would you be better to buy the cell phone?

Question

Quizplus · Accepted Answer

To determine if it's better to buy the cell phone outright or go for the payment plan, we need to calculate the total cost of both options.

For the payment plan, the monthly payment is $18.50 for 36 months, which totals to:

Total cost = Monthly payment x Number of months
Total cost = $18.50 x 36
Total cost = $666

Now let's look at the outright purchase options:

A) $500 - This is cheaper than the total cost of the payment plan, so it's a better option to buy outright.
B) $557 - This is the same as the payment plan total cost, so it doesn't matter which option you choose.
C) $575 - This is more expensive than the payment plan total cost, so it's better to go for the payment plan.
D) $666 - This is the same as the payment plan total cost, so it doesn't matter which option you choose.

Therefore, option B is the best choice since it offers the same total cost as the payment plan but with an outright purchase.

You Are Considering a Cell Phone Package That Needs No