Question

Pam has just moved into a new home and wants to purchase an oven. She expects to live in this house for the foreseeable future. She has narrowed her choices down to two options. Consider the following table, which describes the prices, daily electricity costs, and lifespans of the two ovens she is considering:

Brand
Brand U
Brand V
Price
$2,250$725
Avg. Cost/Day
$0.16$0.28
Lifespan
24 years
8 years

Which brand will have the lower lifetime cost, and how much lower will it be?

Hints: If the product’s expected lifespans differ, assume that repurchase(s) at the same price is possible to equalize the lifespans. Remember that six of the twenty-four years will be leap years, and round all dollar values to the nearest cent.

a.
Brand U will be $1,051.92 cheaper than Brand V. b. Brand U will be$976.92 cheaper than Brand V.
c.
Brand V will be $75 cheaper than Brand U. d. Brand V will be$2109.40 cheaper than Brand U.

1. Euphemia
The brand that will have the lower lifetime cost is that the Brand U will be $976.92 cheaper than Brand V. The correct option is B. ### What is multiplication? Multiplication is the process of multiplying, therefore, adding a number to itself for the number of times stated. For example, 3 × 4 means 3 is added to itself 4 times, and vice versa for the other number. Cost of operating Brand U, Cost of Brand U =$2,250
Number of days in 24 years = (6×366) + (18×365) = 8766
Operational cost = 8766 × $0.16 =$1,402.56
Total cost for 24 years = $3,652.56 Cost of operating Brand V, Cost of Brand U = 3 ×$725 = $2,175 Number of days in 24 years = (6×366) + (18×365) = 8766 Operational cost = 8766 ×$0.28 = $2,454.48 Total cost for 24 years =$4,629.48
Further, the difference between the cost of operation and buying will be,
Difference
= Total cost for 24 years for Brand V – Total cost for 24 years for Brand U
= $4,629.48 –$3,652.56
= $976.92 Hence, the brand that will have the lower lifetime cost is that the Brand U will be$976.92 cheaper than Brand V.