Is free installation really
SafeT Systems charges $125 for installation of their burglar alarm system
and a $35 per month fee.
Uprotect Systems installs their burglar alarm system for free, but charges
more money per month than SafeT. If the average burglar alarm user keeps an
alarm system for 5 years, how much money should Uprotect Systems charge per
month to generate a profit equal to SafeT's over that 5 year span?
The problem is to determine the
monthly fee a burglar alarm company will have to charge a client in a five year
span to match profits with another company while offering free installation
of the system. The competition charges $125 for installation and $35 a
Solve/Investigate the Problem
The first step is to determine
how much profit the competition nets within the five year time span, divide
that by 60 months to find out how much Uprotect systems will have to charge
per month to make the same profit.
of the Problem
SafeT charges $35 for 60 months
(5 years) and an initial $135 installation fee.
y= (35 x 60) +125
y = 2215
SafeT has a $2215 price tag for
60 months of burglar alarm service.
Expanding this equation, for
any month, y = 125 + 35 x,
“x” being the month of service.
= 36.91 which would
round off to $37/month, giving the company $2200 for 5 years.
To find out how much Uprotect will
have to charge to get the same fee, I created a spreadsheet to calculate
how much Uprotect has to charge to make the same profit as SafeT.
Click here for spreadsheet
Extensions of the Problem
An extension of the problem would be to
determine what would happen after the 5 years passed? Which company would
profit the most after time?
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