Question

A lawnmower costs $284, and the six-year extended warranty on the lawnmower costs 17% as much as the lawnmower itself. What is the effective price per year of the extended warranty?
a.
$4.82
b.
$3.93
c.
$8.05
d.
$7.03

Answer 1

To find the effective price per year of the extended warranty for the lawnmower, we first need to calculate the cost of the warranty.

1. **Calculate the cost of the extended warranty**:
\[
\text{Cost of Warranty} = 17\% \text{ of } \$284 = 0.17 \times 284
\]
\[
\text{Cost of Warranty} = 0.17 \times 284 = 48.28
\]

2. **Determine the effective price per year**:
Since the warranty lasts for six years, we can calculate the effective price per year by dividing the cost of the warranty by the number of years.
\[
\text{Effective Price per Year} = \frac{\text{Cost of Warranty}}{6} = \frac{48.28}{6}
\]
\[
\text{Effective Price per Year} \approx 8.047
\]
Rounding to two decimal places gives us approximately \$8.05.

Therefore, the effective price per year of the extended warranty is **c. $8.05**.