Question

Your parents are renting an apartment for you when you go away to college. An annual contract is $502.00/month with a 2-month penalty if you break the lease. The month-to-month contract is $615.00/month. How much is the difference in payments if you stay the whole year?

Answer 1

The month-to-month contract will cost an extra $1356.

Explanation:

"An annual contract is $502.00/month with a 2-month penalty if you break the lease."

If you stay the whole year, and you pay $502 per month, you pay 12 * $502 = $6024 for the entire year.

"The month-to-month contract is $615.00/month."

If you stay the entire year, you pay 12 * $615 = $7380.

The difference is $7380 - $6024 = $1356