Question
As your daughter bugs you to get a new phone you look into the cost of adding another line to your plan. The phone company
As your daughter bugs you to get a new phone you look into the cost of adding another line to your plan. The phone company offers three options for the same phone and plan with a different upfont payment and monthly cost as in the table below. The term of the plan is 2 years. Your personal interest rate which you use for calculations is 6% p.a. Plan option montlky fee upfront cost super tab 80 30 tab 70 210 no tab 60 420 (15%) What is the cheapest plan option? (18%) Through your employer you will get a discount on the monthly fee but not on the one time cost. The person who knows the exact discount left the office early today. Which plan option will benefit the most from such a discount? Give some intuition (max 3 lines). Compute the level of discount for which each plan option is the best choice. e.g. if the discount is between 0 and x% option A is best. between x% and y% option B is best, for discounts greater than y% option C is best.
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