Question

James and Karen have just moved into a new home. Their homeowners insurance policy is $630 each year. Their insurance companys is offering a 7 percent discount if they install dead-bolt locks on all exterior doors. the couple can also receive a 5 percent discount if they install a smoke detector on each floor. They have contacted a local locksmith, who will provide and install dead-blot locks on two exterior doors for $71 each. At the hardware store, smoke detectors cost $18 each, and the home has two floors. James and Karen plan to install the smoke detectors themselves. Assuming their insurance rates remain the same, how many years will it take them to earn back in discounts the cost of the smoke detectors? Round your answer in years to the nearest whole number.

Answer 1

Insurance Policy cost = 630

Total bolt cost = 2* 71 = 142

Total smoke detector cost = 2* 18 = 36

Total cost of bolt and smoke detectors = 142 +36 = 178

Total discount = (7% +5%)*630

Total discount receiving each year= 75.6

Number of years required to recover the total cost of bolt and smoke detectors = 178 / 75.6 = 2.35 years = 2 years