Warranties

Question 1

The extended warranty on a garage door is $238. If the warranty costs 35% of the purchase price, how much does the garage door itself cost, to the nearest dollar?

Revolt · Accepted Answer

$680

Question 2

Say you are buying a bicycle. You do not plan to use the bicycle for more than a few years before buying a new one, but will rely on it in the meantime. You know that your bicicyles tend to need repairs periodically, but you tend to take good care of them overall. The bicycle is relatively cheap, so you do not want to invest too much money into it. What kind of warranty would be a good one to purchase and why?

Revolt · Accepted Answer

limited warranty

Question 3

What does it mean for a manufacturer’s warranty and an extended warranty to overlap?

Revolt · Accepted Answer

Both warranties cover the product over the same period of time.

Question 4

What is the difference between a full warranty and a limited warranty?

Revolt · Accepted Answer

A full warranty will cover any repairs or replacement that the product needs, while a limited warranty will only pay for certain repairs.

Question 5

A toaster oven costing $130 offers an extended warranty for 25% of the purchase price. If the local repair shop will fix a toaster oven for $8, how many times must the toaster oven break in order for the warranty to pay for itself?

Revolt · Accepted Answer

five

Question 6

The extended warranty on a $960 dishwasher is 21% of the purchase price and lasts for eight years. What is the effective cost per year of the extended warranty?

Revolt · Accepted Answer

$25.20

Warranties Answers

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