A combination washer/dryer costs $1,179. New parts for this washer/dryer cost $211, labor to repair it costs $553, and shipping it to and from a repair center costs $152. A full warranty, which covers all aspects of repairing the washer/dryer, costs 30% of the price of the washer/dryer. A limited warranty, which only covers labor costs, only costs 14% of the price of the washer/dryer. Assuming that the washer/dryer needs repairs which include parts, labor, and shipping, which warranty is the better deal, and by how much, rounded to the nearest dollar?
Answer
A
The limited warranty will end up costing the consumer $189 less.
B
The limited warranty will end up costing the consumer $363 less.
C
The full warranty will end up costing the consumer $553 less.
D
The full warranty will end up costing the consumer $174 less.
Explanation
The full warranty costs 30% of $1,179, or $353.70, and covers the parts, labor, and shipping. The limited warranty costs 14% of $1,179, or $165.06, but the consumer must also pay $211 for parts and $152 for shipping, for a total of $528.06. The full warranty is cheaper by $528.06 − $353.70 = $174.36, which rounds to $174. So the full warranty will end up costing the consumer $174 less.
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