Question

an insurance company offers policy holders two plans. the customer can make one annual payment of $1127.58 or 12 payments of $98.99 each year. how much is saved in one year by paying the full amount?

Answer 1

The customer can pay

1 time anually: $1127.58

12 payments of $98.99

To determine how much he will pay if the chooses the monthly plan, multiply the monthly fee by 12

`98.99\cdot12=1187.88`

If he chooses the monthly plan he will pay $1187.88 in a year.

Subtract both fees to determine how much he'll save if the chooses to pay the full amount:

`1187.88-1121.58=60.3`

He will save $60.3