Gce Model Questions Vol1 2019 Commerce Question 21

An electronics retailer advertises a smartphone at a marked price of ₦80,000, stating a 24‑month warranty and a "free 2‑year insurance cover". The fine print limits the insurance to a maximum claim of ₦20,000 per incident and excludes water damage. After 10 months the phone is dropped in water and stops working. The retailer offers two options: (i) Repair the phone at a cost of ₦12,000, with a guarantee that the repair will last for the remaining warranty period. (ii) Provide a replacement phone of the same model at a 15\% discount on the marked price, the original 24‑month warranty continuing. The consumer chooses option (ii). Six months later the replacement fails due to a manufacturing defect (not water damage). The retailer now offers a full refund of the amount paid for the replacement, minus a restocking fee of 5\% of the original marked price. Under the Consumer Protection Act, if a product fails twice within the warranty period, the consumer is entitled to a refund of the total amount paid for the product(s) plus a statutory compensation equal to 10\% of that total amount. Calculate: a) the total amount the consumer actually paid out‑of‑pocket for the phone; b) the total monetary loss the consumer suffers after receiving the final refund and statutory compensation, compared with the situation where the original phone had functioned perfectly for the full 24 months (assume the consumer would have derived a usage value of ₦30,000 over the 24 months); c) the amount of statutory compensation the consumer is entitled to under the Act.