When you pay $0 upfront for a phone over a given period, the sum of the payments is less than the retail price of the phone. How is this possible?

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For example I can purchase an iPhone 14 Pro Max from my carrier for $0 upfront and payments of $41.79CAD over 24 months. The retail price of the phone is $1539. $41.79*24 months = $1002.96. How is it possible that the carrier is essentially selling the phone for significantly less than the retail price? Am I missing something?

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Anonymous 0 Comments

They are willing to give you a discount on the phone to keep you in a a contract for 2 years. You will pay the difference through you phone service in that time. However, be sure you’re actually making payments to own the phone. There may be some wording that makes it seem like you own the phone, when in reality you are renting it or otherwise have to give it back when you upgrade, or pay the $500 difference to keep it.

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