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Phone Purchase Versus Contract Cost

Compare buying a phone up front with a carrier contract while investing the retained purchase amount.

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Calculator inputs

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How to use this calculator

  1. Enter the known values in the units shown. Results update as you type.
  2. Where results are editable, change one to solve backwards. Lock a value to hold it fixed.
  3. Use the worked example to check the method. Reset restores the starting fields.

Use the result with context

Results are estimates for planning and education. Confirm rates, taxes, fees, and legal requirements with the relevant institution or a qualified professional before making a financial decision.

Formula and method

A 600 phone, 20 monthly service and twelve-month 70 contract total 840 for either choice when the investment return is zero.

Up-front cost = phone + service×months. Invested balance compounds monthly after each capped payment difference; end-of-term unused principal is removed from the interest benefit.

Worked example

Enter these known values and leave the other values blank.

Contract duration
12 mos
Interest rate
0 %
Phone price
600 USD
Monthly bill
20 USD
Monthly bill
70 USD
Total cost
840 USD
Interest from investing
0 USD
Total cost
840 USD

Assumptions and limitations

  • Contract length is one to 1,200 whole months. A tolerance of one trillionth of a month accommodates year-to-month unit conversion; calculations use the rounded whole-month count.
  • The monthly investment withdrawal is capped at phone price divided by contract length and occurs before each monthly return. A negative payment difference adds to the invested balance.
  • Assume fixed prices, no taxes or financing charges, and a constant hypothetical return. Investment gains are not guaranteed.
  • Use one currency throughout. Retained currency selector factors are a historical snapshot, not live exchange rates.
  • Clear an editable unknown before solving an inverse. Selection controls and forced outputs cannot be inferred.

Common questions

What does this model assume?

Contract length is one to 1,200 whole months. A tolerance of one trillionth of a month accommodates year-to-month unit conversion; calculations use the rounded whole-month count.

What does the result exclude?

Assume fixed prices, no taxes or financing charges, and a constant hypothetical return. Investment gains are not guaranteed.

References

The calculation follows this reviewed mathematical model: Up-front cost = phone + service×months. Invested balance compounds monthly after each capped payment difference; end-of-term unused principal is removed from the interest benefit. Required model inputs: Use one to 1,200 whole contract months. Annual return must keep the monthly growth factor positive.

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