Question

Muhammad paid $485 for the annual registration of his truck. Which of the following represents the average monthly cost for the registration?

A) $40.42
B) $48.50
C) $58.20
D) $60.25

Answer 1

The average monthly cost for the registration of Muhammad's truck is $40.42, obtained by dividing the total annual cost of $485 by 12 months. The amount $60.25 given in the question is incorrect.

Step-by-step explanation:

To find the average monthly cost for the registration of Muhammad's truck, we can divide the total annual registration fee by the number of months in a year. The annual registration fee is $485, and there are 12 months in a year. Thus, the calculation we need to perform is $485 ÷ 12.

Performing this calculation, we get an average monthly cost of $40.42. Notice that the amount given in the question, $60.25, is incorrect. This average monthly cost is significant because it helps Muhammad budget for the expenses related to his truck over the course of a year. It's a practical example of how averages play a role in financial planning, wherein a lump sum cost is broken down into easier-to-manage periodic payments.