Chapter 1, Problem 32AT

John Rock has narrowed down his selection of a new cell phone to two models with similar features. Model 800 is plug-compatible with his existing car charger and remote earbud/microphone and will cost $140. There is a $35 mail-in rebate for the Model 800. His other choice is the Model 300, which is not plug-compatible with his existing accessories. The price of the Model 300 is $89, and it has a $20 mail-in rebate. But if he buys the Model 300, he will also have to buy the car charger for $30 and an earbud/microphone for $23.

a. All considered, which model would be the least expensive choice? By how much?

b. For either cell phone choice, the monthly charge will be $34 per month with a $5 rebate if fewer than 250 minutes are used during the month. Government fees and taxes will be $9, the access fee is $7, and the Internet connection charge is $15. Based on last year’s usage, John estimates that he will use fewer than 250 minutes in May, June, August, and October. If John’s service starts on January 1, how much will he spend in the next year on cellular phone services?