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

Calculating the total cost expended on oven purchased from Brand U and Brand V. We can conclude that Brand U will be $976.92 cheaper than Brand V.

Total oven cost through 24 Years :

Cost price + (cost per day × number of days)

Number of days per year = 365 days and leap year = 366 days

24 years into days :

(366 × 6) + (365 × (24 - 6)) = 8766 days

8 years = (8766 ÷ 3) = 2922 days

Total cost of BRAND U :

Total cost in 24 years :

(2250 + (0.16 × 8766)) = $3652.56

Total Cost of V :

Total cost in 8 years :

(725 + (2922 × 0.28)) = $1543.16

Total cost in 24 years :

$(1543.16 × 3) = $4629.48

Hence, Brand U is cheaper than Brand V

Difference in Cost :

$(4629.48 - 3652.56)= $976.92

Therefore, Brand U is cheaper than Brand V by $976.92

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