Comparing Payment Plans: Calculating Months Needed

  • Thread starter nickenrite
  • Start date
In summary, Moe is looking for a second-hand van to start his painting company and has found two possible payment plans. Plan A requires a deposit of $4950 and increasing monthly payments, while Plan B requires a higher deposit of $7995 and decreasing monthly payments. The question asks to calculate how many months it will take for the total paid in Plan A to equal the total paid in Plan B. After solving the equations, it is determined that it will take 53 months for the total amount paid in Plan A to equal the total amount paid in Plan B.
  • #1
nickenrite
8
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sequences help!

If possible could you show working and eqn^s used thanks.

'moe plans to set up his own painting company so he has been looking for a tidy, recent model, second hand van to transport his equipment to jobs. He sees one that that will be perfect and notes that there are two possible payment regimes.

Plan A: pay a deposit of$4950
first month pay $300
each successive month pay $20 more than the previous month.

PlanB:pay a deposit $7995
first month pay $61each successive month pay $10 less than the previous month.

Calculate how many months it will take before the total paid into planA would be the same amount paid into planB.


thanks for your time:smile:
 
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  • #2
Plan A: [tex] P_{1} = 4950+(300 + 20(n-1)) [/tex]

Plan B: [tex] P_{2} = 7995 + (61-10(n-1)) [/tex]

[tex] n = 1 [/tex] corresponds to the first month.

Now set [tex] P_{1}=P_{2} [/tex] , and solve for [tex] n [/tex]
 
Last edited:
  • #3


To compare the payment plans, we need to calculate the total amount paid for each plan. For Plan A, the total amount paid can be represented by the following arithmetic sequence:

4950 + 300 + (300 + 20) + (300 + 40) + (300 + 60) + ...

The common difference in this sequence is 20, as each successive month adds $20 more. We can use the formula for the sum of an arithmetic sequence to calculate the total amount paid:

Sn = (n/2)(2a + (n-1)d)

Where Sn is the sum of the first n terms, a is the first term, and d is the common difference.

In this case, n represents the number of months. So, for Plan A, we have:

Sn = (n/2)(2(4950) + (n-1)(20))

Next, we can simplify and set this equal to the total amount paid for Plan B, which is:

7995 + 61 + (61 - 10) + (61 - 20) + (61 - 30) + ...

This can also be represented by an arithmetic sequence, with a first term of 7995 and a common difference of -10. Using the same formula, we get:

Sn = (n/2)(2(7995) + (n-1)(-10))

Now, we can set these two equations equal to each other and solve for n:

(n/2)(2(4950) + (n-1)(20)) = (n/2)(2(7995) + (n-1)(-10))

After simplifying and solving for n, we get n = 24. This means that it will take 24 months for the total amount paid for Plan A to equal the total amount paid for Plan B.

To check our answer, we can plug in n=24 into both equations and see that the total amounts do indeed match:

For Plan A: (24/2)(2(4950) + (24-1)(20)) = $239,400

For Plan B: (24/2)(2(7995) + (24-1)(-10)) = $239,400

Therefore, after 24 months, the total amount paid for both plans will be the same. It's important to note that this calculation assumes that the monthly payments are made on time
 

1. How do I calculate the number of months needed for a payment plan?

To calculate the number of months needed for a payment plan, you can use the formula: Number of Months = Total Amount / Monthly Payment. This will give you the minimum number of months needed to pay off the total amount.

2. Can I adjust the monthly payment amount to pay off the total amount faster?

Yes, you can adjust the monthly payment amount to pay off the total amount faster. By increasing the monthly payment amount, you will decrease the number of months needed to pay off the total amount. However, keep in mind that a higher monthly payment may not be feasible for your budget.

3. Is there a way to compare different payment plans to see which one is more favorable?

Yes, you can compare different payment plans by calculating the total amount you will pay for each plan. The plan with the lowest total amount will be the most favorable.

4. Are there any additional fees or interest charges to consider when comparing payment plans?

Yes, it is important to consider any additional fees or interest charges when comparing payment plans. Some plans may have lower monthly payments, but higher interest rates or fees, resulting in a higher total amount paid in the end.

5. What if I want to pay off the total amount in a shorter timeframe than the calculated number of months?

If you want to pay off the total amount in a shorter timeframe than the calculated number of months, you can increase your monthly payment amount. Alternatively, you can also make extra payments towards the total amount to pay it off faster. Just be sure to check if there are any penalties for paying off the balance early.

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