Jenna is deciding between two cell-phone plans. The first plan has a $50 sign-up fee and costs $20 per month. The second plan has a $30 sign-up fee and costs $25 per month. If Jenna has to sign a one-year contract, which plan will be cheaper?

Question

Jenna is deciding between two cell-phone plans. The first plan has a $50 sign-up fee and costs $20 per month. The second plan has a $30 sign-up fee and costs $25 per month. If Jenna has to sign a one-year contract, which plan will be cheaper?

Answer 1

To determine which plan is cheaper, we need to compare the total costs of both plans over one year.

For the first plan, the sign-up fee is $50 and the monthly cost is $20. Therefore, the total cost for one year is $50 + (12 * $20) = $250.

For the second plan, the sign-up fee is $30 and the monthly cost is $25. Therefore, the total cost for one year is $30 + (12 * $25) = $330.

Comparing the total costs, we can see that the first plan is cheaper, with a total cost of $250 compared to $330 for the second plan. So Jenna should choose the first plan.