Question

an is considering changing his electricity plan. With his current plan, he pays $0.95$0.95 per kilowatt (kw) of energy usage, regardless of whether the usage is during peak hours or off-peak hours. Ian’s average monthly bill is about $125$125, due to the fact that he consumes an average of 131131 kw per month. At least 5050 kw are consumed during peak hours and at least 4545 kw are used during off-peak hours each month. The new energy plan offers to change Ian’s rates to $1.05$1.05 per kilowatt during peak hours and $0.79$0.79 per kilowatt during off-peak hours. Ian decides to sign up. Without completely changing his energy usage habits, what is the best way for Ian to consume energy while minimizing his monthly bill on the new plan?

Answer 1

In order for his electric bill to lower, he must try to consume as much as possible of the remaining 36 kw during off peak hours.

Step-by-step explanation:

Currently Ian's electric bill is $125 (= 131 x $0.95)

with the new plan, his bill will be:

• 50 x $1.05 = $52.50
• 45 x $0.79 = $35.55
• total $88.05

but he still has 36 kw of regular consumption, if he consumes them during peak hours his bill will increase to $125.85 (= $88.05 + $37.80), but if he consumes them during off peak hours his total bill will only be $116.49 (= $88.05 + $28.44).

In order for his electric bill to lower, he must try to consume as much as possible of the remaining 36 kw during off peak hours.