Question

* NOTICE THIS IS A 2 PART QUESTION

You are choosing between two plans at a discount warehouse. Plan A offers an annual membership fee of $300 and you pay 70%, of the manufacturers reccomended list price. Plan B offers an annual membership fee of $40 and you pay 90% of the manufacturers reccomended list price. How many dollars of merchandise would you have to purchase in a year to pay the same amount under both plans? What will be the total yearly amount paid to the warehouse for each plan?

Answer 1

Answer: you would have to purchase $1300 of merchandise and the total yearly amount paid to the warehouse for each plan is $1210

Explanation:

Let x represent the number of dollars of merchandise that you would have to purchase in a year to pay the same amount under both plans.

Plan A offers an annual membership fee of $300 and you pay 70%, of the manufacturers reccomended list price. This means that the total cost of using plan A would be

300 + 0.7x

Plan B offers an annual membership fee of $40 and you pay 90% of the manufacturers reccomended list price.

This means that the total cost of using plan B would be

40 + 0.9x

For both plans to be the same,

300 + 0.7x = 40 + 0.9x

0.9x - 0.7x = 300 - 40

0.2x = 260

x = $1300

The total yearly amount paid to the warehouse for each plan would be

40 + 0.9 × 1300 = $1210