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Royal Plan: £6 p/m & £59
Royal Plan: £6 p/m & £59.49 annual fee Free Minutes Cost per Extra Minute Standard Calls 300 24p Mobiles (same network) 200 26p Mobiles (other networks) 100 32p Texts 150 free text 11p per text Gem Plan: £5.49 p/m & £54.99 annual fee Free Minutes Cost per Extra Minute Standard Calls 250 25p Mobiles (same network) 150 25p Mobiles (other networks) 150 Texts 200 free texts 12p per text 30p If you use 200 same network and 150 other network minutes per month, what is the annual saving for a Gem Plan customer compared to a Royal Plan customer? A) £52.61 B) £58.61 C) £54.61 D) £56.61
Expert Solution
Answer:
If We use only 200 same network and 150 other network minutes per month, then our total cost of it under both plan we will be?
Under Gem Plan:
First 150 minutes is free for same network and other network,
So there is charge of 50 extra minute for same network at 25p.
So, 50 * 0.25
= 12.5
So, total monthly cost is,
5.49 + 12.5 = 17.99
Here 5.49 is plan cost per month
So total annual bill is,
17.99 * 12 = 215.88
Then add annual fee,
215.88 + 54.99
= 270.87
So total annual cost in this plan is 270.87
Now under Royal plan:
Here first 200 minutes for same network are free and 100 minutes for other network,
So there is charge of 50 extra minute for other networks at 32p.
So, 50*0.32
= 16
So, total monthly cost is,
6 + 16 = 22
here 6 is plan cost per month
So total annual bill is,
22 * 12 = 264
Then add annual fee,
264+ 59.49
= 323.49
So total annual cost in this plan is 323.49
So saving under Gem plan is,
Total cost of Royal plan - Total cost of Gem plan
= 323.49 - 270.87
= 52.62
So option a is correct answer.
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