Question

A real estate agent is considering changing her cell phone plan; there are three to chose from - all involve a monthly fee of $19.00

Plan A charges $0.43 per minute for daytime calls and $0.15 per minute for evening calls.

Plan B charges $0.55 per minute for daytime calls and $0.14 per minute for evening calls.

Plan C has a flat rate of $47 with up to 200 minutes of calls included per month and a charge of $0.32 per minute beyond that, day or evening.

If the agent will use the service for daytime calls only, how many minutes per month should she stay below so that Plan A is the least cost alternative?

Answer 1

Since all the three plans involve a monthly fee of $19 so we dont need to consider this in our calculation as every plan will incur this cost.

Now as planc is direct and has flat cost of $47 upto 200 minutes, so we will compare this with plan A (as plan B cost per minute $0.55 is higher than plan A). So if plan A works for 200 minutes then it will cost us $86 which is way beyond $47 charged by plan C.

So we need to come up at such a time in minutes where plan A cost will be minimum than $47.

So by hit and trial method we will chose different values and will try to get value within $47 for plan A

So lets try 150 minutes

Plan A- 0.43*150=64.5 (which is more than $47)

Now try 100 minutes

Plan A- 0.43*100=43 (which is less than $47)

Now try 110 minutes

Plan A- 0.43*110=47.3 (which is close to 47 but more than 47)

Now lets try 109.3

Plan A- 0.43*109.3= 46.999 (which is very close to 47 and below it.

So finally the answer should be 109.30 minutes

So the Agent should use the service for daytime calls only below 109.30 minutes per month for plan A to be minimum cost