Question

Anna is trying to save some money on her electric bill. Her electric company has come up with a new plan designed to charge customers based on when they use electricity. She is trying to decide if the new interval use plan would be better than the standard use plan for her needs. Calculate the monthly costs of both plans if she uses 1,185 kWh of electricity per month with 500 kWh on-peak usage and the rest off-peak usage.

Standard Use Plan
8.5 cents/kWh for the first 600 kWh
11 cents/kWh for anything over 600 kWh

Interval Use Plan
On-peak hours - 16 cents/kWh
Off-peak hours - 4 cents/kWh
a.standard use plan - $64.35; interval use plan - $80.00
b.standard use plan - $115.35; interval use plan - $107.40
c.standard use plan - $64.35; interval use plan - $107.40
d.standard use plan - $115.35; interval use plan - $80.00

Answer 1

Answer: B

Explanation:

Answer 2

First, we are going to calculate her monthly off-peak usage:
1,185 kWh - 500 kWh = 685 kWh

Now that we know her monthly electricity consumption is 500 kWh on-peak and 685 kWh off-peak, lets calculate the cost of each plan:
Standard use plan
1,185 kWh - 600 kWh = 585 kWh
- For the first 600 KWh:

`600kWh( (8.5cents)/(kWh) )=5100cents`
Since 100 cents = 1 dollar,
`5100cents( (1dollar)/(100cents) )` = $51
- For the remaining 585 kWh:

`585 kWh( (11cents)/(kWh) )=6435cents`
Since 100 cents = 1 dollar,
`6435cents( (1dollar)/(100cents))` = $64.35
Total cost of the standard use plan: $51 + $64.35 = $115.35

Interval use plan
- On-peak hours:

`500kWh( (16cents)/(1kWh) )=8000cents`
Since 100 cents = 1 dollar,
`8000cents( (1dollar)/(100cents) )` = $80
- Off-peak hours:

`685 kWh( (4cents)/(1kWh) )=2740cents`
Since 100 cents = 1 dollar,
`2740cents( (1dollar)/(100cents))` = $27.40
Total cost of the interval use plan: $80 + $27.40 = $107.40

We can conclude that:
1. The new interval plan will be better for Anna since she will save $7.95 per month in her electric bill.
2. The correct answer is: b.standard use plan - $115.35; interval use plan - $107.40