Step 1. Formulation : We know that the company can hire a computer for Rs. 2,000 per month or the company can buy the compute for Rs. 25,000. The company has to use the computer for 0 just one month then the hiring the computer will be cheaper. Here we have find out number of months beyond which it will be cheaper to buy a computer.
Mathematical formulation : Let the number of months beyond which it will be cheaper to buy a compute = x months.
Rate of hiring computer = Rs. 2,000 per month
The amount of hiring a computer for x months = Rs. 2,000 x
The cost of the compute = Rs. 25,000
The company will not have to pay more if cost of computer is less than the hiring charges for computer.
Step 3. Interpretation :
If 25/2 <x. The least value of x is 13 month (more than 12(1/2)) It will be cheaper for the company to buy a computer if it has to hire a computer 13 months or more than 13 months.
we have assumed that :
(i) The rate of hiring a computer ** same throughout the *****.
(ii) After 13 months the cost of computer may not increase
