Question

Your parents are considering renting you an apartment instead of paying room and board at your college. The month-to-month contract is $539.00/month and the annual contract is $467.00/month. If you break the annual contract, there is a 2-month penalty.

3. How much do your parents save if you stay a whole year by entering into an annual contract rather than a month-to-month contract?

4. If you enter into an annual contract but decide to leave after 5 months, how much do your parents lose by not doing the month-to-month contract.

Answer 1

3.well first you have to find out how much one year will be for both te contract and the month to month.
month to month is 6,468 dollars a year
The contact is 5,604
you subtract the month - contact / 6,468- 5,604=864 is how much they save

Answer 2

month to month contract = 539/month
annual contract = 467/month ; 2 month penalty if contract is broken.

m: 539 x 12 = 6,468
a: 467 x 12 = 5,604

6,468 - 5,604 = 864 savings.

m: 539 x 5 = 2,695
a: 467 x (5+2) = 3,269

3,269 - 2,695 = 574 loss.