Gareth has just remodeled his kitchen and wants to buy one of two stand-alone freezers. Consider the following table, which
displays the prices, electricity costs, and lifespans of the two freezers he is considering:
L
Brand
Price
Avg. Cost/Wk
Lifespan
Brand R
$575
$3.17
10 years
Brand S
$98
$4.54
2 years
No matter which brand he chooses, Gareth will pay for the freezer on his credit card, which has an APR of 9.31%,
compounded monthly. It takes Gareth eighteen months to pay off a Brand S freezer and four years to pay off a Brand R
freezer. Assuming that Gareth makes no other purchases or payments with his credit card, over the next ten years, which
brand of freezer will have a lower lifetime cost, and how much lower will it be? (Round all dollar values to the nearest cent.)
a Brand R will be $548.18 cheaper than Brand S.
b. Brand R will be $712.40 cheaper than Brand S.
c. Brand S will be $85.00 cheaper than Brand R.
d. Brand S will be $164.22 cheaper than Brand R.