36
QuizMultiple Choice

Home Ownership

Question 36 • Financial Math - MA2007

The Baum and the Freeman families are comparing their electric bills for the past month. The Baum family is on a standard use plan and the Freeman family is on an interval use plan. Each family’s usage is listed on the chart below:Standard Use PlanInterval Use Plan8.5 cents/kWh for the first 400 kWh12 cents/kWh for the next 400 kWh14.5 cents/kWh for anything over 800 kWhOn-peak hours - 13 cents/kWhOff-peak hours - 2 cents/kWhBoth families use 1250 kWh for the given 30 day period. The Freeman family uses 400 kWh during on-peak hours and 850 during off-peak hours. Which family ends up paying more for their utilities? How much more?

Answer
A
The Freeman family pays $260.83 more than the Baum family.
B
The Freeman family pays $250.00 more than the Baum family.
C
The Baum family pays $69.00 more than the Freeman family.
D
The Baum family pays $78.25 more than the Freeman family.

Explanation

The Baum family pays $34 for the first 400 kWh, $48 for the next 400 kWh, and $65.25 for the remaining 450 kWh, for a total of $147.25. The Freeman family pays $52 for 400 on-peak kWh and $17 for 850 off-peak kWh, totaling $69. The Baum family pays $147.25 − $69 = $78.25 more, so the correct choice is “The Baum family pays $78.25 more than the Freeman family.”

AI-written and checked against the verified answer.

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