159k views
3 votes
Seth has just decided to replace his computer. His old computer cost him $1,433 when he bought it exactly seven years ago. Seth paid for it with his credit card, which has an APR of 11.70%, compounded monthly. He made no other purchases with the card and paid off his balance after two and a half years of making identical monthly payments. The computer consumed about $0.79 of electricity every day. In total, what percentage of the lifetime cost of the computer did the electricity make up?

1) 82.157%
2) 58.500%
3) 21.718%
4) 54.898%

User Arghavan
by
7.2k points

1 Answer

6 votes

Final answer:

The electricity cost for seven years of using the computer is $2,030.35. However, without knowing the exact total cost paid for the computer, including interest from credit card payments, we cannot calculate the exact percentage of the lifetime cost that the electricity makes up. Consequently, none of the options provided are correct with the given data.

Step-by-step explanation:

To find out the percentage of the lifetime cost of the computer that electricity usage made up, we need to calculate two main costs: 1) The total cost of the computer including the interest paid on the credit card, and 2) The total cost of electricity used by the computer over seven years. Seth has just decided to replace his computer, which initially cost him $1,433. With an APR of 11.70%, compounded monthly, over two and a half years of identical monthly payments, the total amount paid includes the principal and the accumulated interest.

We do not have enough data to calculate the total payments made to the credit card due to a lack of specific payment amounts or a formula given. But since the electricity cost is taken as a separate portion, we will focus only on calculating that part. The daily cost of electricity is $0.79, and the computer was used for seven years. Hence, the total electricity cost is $0.79 per day * 365 days per year * 7 years = $2,030.35.

The question asks for the percentage of this total electricity cost out of the lifetime cost of the computer. Assuming no additional costs (since we cannot calculate the total cost paid including interest), the percentage is ($2,030.35 / $1,433) * 100 = 141.67%. However, because we know that Seth paid more than the principal due to the interest, this percentage is definitely less than 141.67%, and among the options provided, none of them are correct given the data at hand.

User Magendran V
by
6.9k points