Question

Jerry buys a new cell phone and signs up for a yearly cell phone plan. The cell phone costs $329 and the yearly plan costs 490 per year for every year he uses the cell phone. The only costs associated with the cell phone are the purchase price and the cost of the yearly cell phone plan.

a) Describe the annual cost of the cell phone per year as a function of the number of years he uses the cell phone.

b) What happens to the average price per year the longer Jerry holds onto this plan and explain why?

Answer 1

(329 + 490X) / X = Cost

Thus, the average annual price decreases as the cell phone is used for more years, because the fixed cost (the cost of the value of the cell phone) is divided each time by a greater number of years.

Explanation:

Since Jerry bought a new cell phone and signed up for a yearly cell phone plan, and the cell phone costed $ 329 and the yearly plan costs $ 490 per year for every year he uses the cell phone, to determine the annual cost of the cell phone per year as a function of the number of years he uses the cell phone, the following mathematical reasoning must be performed:

(329 + 490X) / X = Cost

So, for example, if the cell phone was used for 3 years, the function would apply as follows:

(329 + 490x3) / 3 = X

(329 + 1470) / 3 = X

1,799 / 3 = X

599.66 = X

Thus, the average annual price decreases as the cell phone is used for more years, because the fixed cost (the cost of the value of the cell phone) is divided each time by a greater number of years.