Kaplan

Fellas I am also confused with the term MAXIMUM here.

In case of Regular calls:
Total Cost= 3*1.6+57*.8=50.4

In case of $25 fee:
Total Cost=3*1.6*.6+57*.8*.6=30.24 or 50.4*.6=30.24
Now if we add $25 fee this cost becomes 55.24

Now where is he saving.
Please tell me where i am going wrong....

Dear Asbestos,
The case you have given shows that the 25$ plan is expensive for him. He would have been better off not taking the 25$ plan. In order to get the best out of plan he should use it in such a way that the discount of 40% is more than the flat payment of 25$. This discount is .64$ for calls less than 3 min and only .32$ for any extra min. Thus the max saving will happen if only calls less than 3 mins are made. If calls less than 3 min are made everytime,than the total expense would have been
=1.6*60=96

now suppose he pays 25$ and takes the discount
cost of calls made=1.6*60*.6=57.6
total money to be paid=57.6+25=82.6

saving made=96-82.6=13.4

I hope i am clear

This problem is a constant dilemma that a mobile user faces while taking a special plan

rah_pandey wrote:Dear Asbestos,
The case you have given shows that the 25$ plan is expensive for him. He would have been better off not taking the 25$ plan. In order to get the best out of plan he should use it in such a way that the discount of 40% is more than the flat payment of 25$. This discount is .64$ for calls less than 3 min and only .32$ for any extra min. Thus the max saving will happen if only calls less than 3 mins are made. If calls less than 3 min are made everytime,than the total expense would have been
=1.6*60=96

now suppose he pays 25$ and takes the discount
cost of calls made=1.6*60*.6=57.6
total money to be paid=57.6+25=82.6

saving made=96-82.6=13.4

I hope i am clear

This problem is a constant dilemma that a mobile user faces while taking a special plan

shouldn't the bold part be 1.6 * 3 + .8 * 57 +25 = 75.4 to calculate the minimum amount he needs to pay while using the 25$ scheme..
and thus the profit will be maximized.. ?

shouldn't the bold part be 1.6 * 3 + .8 * 57 +25 = 75.4 to calculate the minimum amount he needs to pay while using the 25$ scheme..
and thus the profit will be maximized.. ?

The calculation shown by you are without discounts. why? there is a 40% discount on cost of call while availing 25$ scheme.

Whatever talk plan you choose you need to calculate costs pre discount and post discount on it to calculate the actual profit.

like if you chose 3min+57 min then both pre discount and post discount costs have to be calculated on this usage and not on 3min+57 and 60 min

Please note that it is not necessary that a subscriber will always gain after taking such a scheme. It all depends on the usage pattern

Please refer this link :
https://www.beatthegmat.com/re-calling-plan-t40591.html