He computed incorrectly. He didn't include the usage, with the reservation cost. A reduced usage still applies. The correct price is... h = hours in a year =

He computed incorrectly. He didn't include the usage, with the reservation cost. A reduced usage still applies. The correct price is... h = hours in a year = 8765 ($325+($0.03 * h))/12 = $49.00/month The best deal is a 3 year block ($500+($0.03 * h * 3))/36 = $35.80/month