Question

Lou buys bottles of water from the grocery store, but is now considering the environmental ramifications of the waste. he is considering getting a water filtration system in his home, but it will cost $1,000, which would mean he would take out a small loan at 7% interest for one year. if bottled water costs $7 a week, what would be the difference in the costs after one year?

Answer 1

To calculate the difference in costs after one year, we need to consider the cost of bottled water for one year and the cost of the water filtration system including the interest on the loan.

Cost of bottled water for one year:

$7 per week x 52 weeks = $364

Cost of the water filtration system with interest:

Loan amount = $1,000

Interest rate = 7%

Loan period = 1 year

Interest on the loan:

Interest = Loan amount x Interest rate = $1,000 x 7% = $70

Total cost of the water filtration system after one year:

$1,000 + $70 = $1,070

Difference in costs after one year:

Cost of bottled water - Cost of water filtration system

$364 - $1,070 = -$706

The difference in costs after one year is -$706. This means that choosing the water filtration system would save Lou $706 compared to buying bottled water.

Step-by-step explanation: