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Let's walk through the solution step-by-step.
### 1. Evaluating Extra Costs for Rent-to-Own Program
We need to find out how much extra a consumer would pay if they used the rent-to-own program instead of buying the item with cash.
#### For the potop:
- Cash price: \[tex]$1,000 - Rent-to-own cost: \$[/tex]150 per month for 12 months
First, calculate the total cost for rent-to-own:
[tex]\[ \$150 \times 12 = \$1,800 \][/tex]
Extra cost:
[tex]\[ \$1,800 - \$1,000 = \$800 \][/tex]
The consumer would pay an extra \[tex]$800 if they used the rent-to-own program to buy the potop, rather than using cash. ### 2. Determining the Cheapest Option Among all payment methods, we need to identify the option with the lowest overall cost. #### Cash prices: - Potop: \$[/tex]1,000
- Second item: \[tex]$800 #### Installment plans: - Potop: \$[/tex]100.83 per month for 12 months
[tex]\[ \$100.83 \times 12 = \$1,209.96 \][/tex]
- Second item: \[tex]$80.67 per month for 12 months \[ \$[/tex]80.67 \times 12 = \[tex]$968.04 \] The cheapest option overall is the cash price for the second item, which is \$[/tex]800.
### 3. Identifying the Most Expensive Option
We now need to determine the most expensive payment method between all options.
#### Rent-to-own costs:
- Potop: \[tex]$150 per month for 12 months \[ \$[/tex]150 \times 12 = \[tex]$1,800 \] - Second item: \$[/tex]140 per month for 12 months
[tex]\[ \$140 \times 12 = \$1,680 \][/tex]
The most expensive overall option is to use the rent-to-own plan for the potop, which costs \[tex]$1,800. ### Summary of Results - Extra cost for rent-to-own for the potop: \$[/tex]800
- Cheapest option: \[tex]$800 - Most expensive option: \$[/tex]1,800
Now, let's fill in the blanks in the provided table.
```
A consumer would pay an extra [tex]$800 if they used the rent to own program to buy the computer, rather than using cash. For all of the items, using $[/tex]800 is the cheapest option over the life of the contract.
The most expensive overall option is to use $1,800 to purchase the item.
```
### 1. Evaluating Extra Costs for Rent-to-Own Program
We need to find out how much extra a consumer would pay if they used the rent-to-own program instead of buying the item with cash.
#### For the potop:
- Cash price: \[tex]$1,000 - Rent-to-own cost: \$[/tex]150 per month for 12 months
First, calculate the total cost for rent-to-own:
[tex]\[ \$150 \times 12 = \$1,800 \][/tex]
Extra cost:
[tex]\[ \$1,800 - \$1,000 = \$800 \][/tex]
The consumer would pay an extra \[tex]$800 if they used the rent-to-own program to buy the potop, rather than using cash. ### 2. Determining the Cheapest Option Among all payment methods, we need to identify the option with the lowest overall cost. #### Cash prices: - Potop: \$[/tex]1,000
- Second item: \[tex]$800 #### Installment plans: - Potop: \$[/tex]100.83 per month for 12 months
[tex]\[ \$100.83 \times 12 = \$1,209.96 \][/tex]
- Second item: \[tex]$80.67 per month for 12 months \[ \$[/tex]80.67 \times 12 = \[tex]$968.04 \] The cheapest option overall is the cash price for the second item, which is \$[/tex]800.
### 3. Identifying the Most Expensive Option
We now need to determine the most expensive payment method between all options.
#### Rent-to-own costs:
- Potop: \[tex]$150 per month for 12 months \[ \$[/tex]150 \times 12 = \[tex]$1,800 \] - Second item: \$[/tex]140 per month for 12 months
[tex]\[ \$140 \times 12 = \$1,680 \][/tex]
The most expensive overall option is to use the rent-to-own plan for the potop, which costs \[tex]$1,800. ### Summary of Results - Extra cost for rent-to-own for the potop: \$[/tex]800
- Cheapest option: \[tex]$800 - Most expensive option: \$[/tex]1,800
Now, let's fill in the blanks in the provided table.
```
A consumer would pay an extra [tex]$800 if they used the rent to own program to buy the computer, rather than using cash. For all of the items, using $[/tex]800 is the cheapest option over the life of the contract.
The most expensive overall option is to use $1,800 to purchase the item.
```
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