Question

You decide to sign up for a 24-month cell phone plan with a monthly fee in addition to the cost of the cell phone. The plan you chose costs $55 per month for unlimited talk, text, and data normally. The company has some offers right now that could help you save money. But, you can only use one of these offers.

Which of these deals will save you the most money overall on the $55 per-month plan?
Question 2 options:

Receive the first month free if you sign the contract today.


Sign up for autopay using a debit card and save $5 per month for 24 months.


Trade in your old phone and save 5 percent per month for 24 months.


Buy a smartwatch today, and get a $15 per month discount for the first six months.

Answer 1

Compute total savings over 24 months (baseline = $55 × 24 = $1,320):

- First month free: saves $55 → total = $1,320 − $55 = $1,265.
- Autopay $5/month (24 months): saves $5 × 24 = $120 → total = $1,320 − $120 = $1,200.
- Trade-in 5% off ($55 × 5% = $2.75/month): saves $2.75 × 24 = $66 → total = $1,320 − $66 = $1,254.
- Smartwatch $15/month for 6 months: saves $15 × 6 = $90 → total = $1,320 − $90 = $1,230.

The best deal is the autopay using a debit card: it saves $120 overall (total cost $1,200).