Question

required: verizon offers to sell cellular phones listing for $95.09 with a chain discount of 15/10/5. cellular company offers to sell its cellular phones that list at $98.19 with a chain discount of 25/5. if irene is to buy seven phones, how much could she save if she buys from the lower - priced company? note: do not round intermediate calculations. round all dollar amounts to the nearest hundredth. round your final answer to the nearest cent. amount saved

Explanation:

Step1: Calculate the net - price factor for Verizon's chain discount

The chain discount for Verizon is 15/10/5. The net - price factors are calculated as follows:
The first discount of 15% gives a factor of $(1 - 0.15)=0.85$.
The second discount of 10% gives a factor of $(1 - 0.10)=0.90$.
The third discount of 5% gives a factor of $(1 - 0.05)=0.95$.
The net - price factor for Verizon, $N_{V}=0.85\times0.90\times0.95 = 0.72675$.

Step2: Calculate the total cost for Verizon for 7 phones

The list price of one phone at Verizon is $L_{V}=\$95.09$.
The total cost for 7 phones at Verizon, $C_{V}=7\times L_{V}\times N_{V}=7\times95.09\times0.72675=\$487.197975$.

Step3: Calculate the net - price factor for Cellular Company's chain discount

The chain discount for Cellular Company is 25/5. The net - price factors are:
The first discount of 25% gives a factor of $(1 - 0.25)=0.75$.
The second discount of 5% gives a factor of $(1 - 0.05)=0.95$.
The net - price factor for Cellular Company, $N_{C}=0.75\times0.95 = 0.7125$.

Step4: Calculate the total cost for Cellular Company for 7 phones

The list price of one phone at Cellular Company is $L_{C}=\$98.19$.
The total cost for 7 phones at Cellular Company, $C_{C}=7\times L_{C}\times N_{C}=7\times98.19\times0.7125=\$494.073375$.

Step5: Calculate the amount saved

The amount saved, $S = C_{C}-C_{V}=494.073375 - 487.197975=\$6.88$.

Answer:

$6.88$