Question

You have decided that your coffee habit has become too expensive! You currently purchase a large speciality coffee from the local cafe twice a day. Each coffee costs you $4.74. You have decided to purchase a $105 high-end coffee maker so you can make your coffee at home. After the cost of coffee, syrups, whip cream, etc., the cost of making your coffee at home is $1.81. By making your own coffee, how much money do you save over the first year?

Answer 1

Cost of large speciality coffee from the local cafe = $4.74

Coffee purchased = 2 per day

Days in the year = 365

Tota number of coffee purchased in a year = 365 * 2 = 730 coffees

Calculate the total cost of coffee purchased in a year -

Total cost = Tota number of coffee purchased in a year * Cost of large speciality coffee from the local cafe

Total cost = 730 * $4.74 = $3,460.2

Thus,

The total cost of coffee purchased in a year is $3,406.2

The cost of making coffee at home is $1.81 per coffee.

Coffee made in a day = 2 per day

Days in the year = 365

Tota number of coffee made in a year = 365 * 2 = 730 coffees

Total cost of making coffee in a year at home = Cost of high end coffee maker + (Cost of making coffee at home * Number of coffees made in a year)

Total cost of making coffee in a year at home = $105 + [730 * $1.81) = $105 + $1,321.3 = $1,426.3

The total cost of making coffee in a year at home is $1,426.3

Calculate the savings made in first year by making coffee at home -

Savings = Total cost of coffee purchased in a year from local cafe - Total cost of making coffee in a year at home

Savings = $3,406.2 - $1,426.3 = $1,979.9

Thus,

The money saved over the first year by making our own coffee is $1,979.9