17
QuizMultiple Choice

Home Ownership

Question 17 • Financial Math - MA2007

Isaiah is trying to decide if the interval use plan is better than the standard use plan for his electricity consumption. Calculate the monthly costs of both plans if he uses 1,275 kWh of electricity per month with 575 kWh on-peak usage and the rest off-peak usage.Standard Use PlanInterval Use Plan7.5 cents/kWh for the first 400 kWh10 cents/kWh for anything over 400 kWhOn-peak hours - 15 cents/kWhOff-peak hours - 3 cents/kWh

Answer
A
standard use plan - $117.50; interval use plan - $107.25
B
standard use plan - $87.50; interval use plan - $86.25
C
standard use plan - $117.50; interval use plan - $86.25
D
standard use plan - $87.50; interval use plan - $107.25

Explanation

For the standard use plan, the first 400 kWh cost 400 × $0.075 = $30, and the remaining 875 kWh cost 875 × $0.10 = $87.50, for a total of $117.50. For the interval plan, the off-peak amount is 1,275 − 575 = 700 kWh. Its cost is 575 × $0.15 + 700 × $0.03 = $86.25 + $21 = $107.25. Choice A gives both monthly costs correctly.

AI-written and checked against the verified answer.

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