Customer: “Currently I am paying $60.00 a month for my service. I would like to upgrade to the $80.00 service package because my new employer offers a 20% discount with your company. What would be the cost difference compared to what I am paying now if I upgraded?”
Employee: “With your discount you would only pay $4.00 a month more for the upgraded plan.”
$4.00
$6.00
$22.00
$36.00
The Correct Answer and Explanation is:
The correct answer is: $4.00
Explanation (300+ words):
To determine the cost difference for the customer who wants to upgrade their service, we need to calculate the new cost after applying the 20% discount and then compare it with what they are currently paying.
Step 1: Understand the current and proposed costs
- Current service cost: $60.00/month
- Proposed upgraded service cost: $80.00/month before discount
- Employer discount: 20% off the upgraded plan
Step 2: Calculate the 20% discount on the upgraded plan
To find 20% of $80.00: 80.00×0.20=16.0080.00 \times 0.20 = 16.00
Step 3: Subtract the discount from the upgraded plan
80.00−16.00=64.0080.00 – 16.00 = 64.00
So, after the 20% discount is applied, the customer will pay $64.00 per month for the upgraded plan.
Step 4: Find the cost difference
Now compare the new discounted price with what the customer currently pays: 64.00−60.00=4.0064.00 – 60.00 = 4.00
So, the customer will only pay $4.00 more per month if they upgrade with the discount.
Why the other choices are incorrect:
- $6.00: This would suggest the discounted price is $66.00, which is incorrect.
- $22.00: This would be the difference without the discount ($80.00 – $60.00), but the customer receives a 20% discount.
- $36.00: This is far too high and not relevant to any step in the calculation.
Conclusion:
The employee is correct in stating the cost difference would only be $4.00 more per month after the 20% discount is applied. The correct answer is therefore: $4.00.