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Virtual Circuit Service

The following design problem concerning implementation of virtual circuit service. If virtual circuits are used internal to the subnet, each data packet must have a 3-byte header, and each router must tie up 8 bytes of storage for circuit identification. If datagrams are used internally, 15-byte headers are needed, but no router table space is required. Transmission capacity costs 1 cent per 10 bytes, per hop. Router memory can be purchased for 1 cent per byte and is depreciated over two years (business hours only). The statistically average session runs for 1000 sec, in which time 200 packets are transmitted. The mean packet requires four hops. Which implementation is cheaper, and by how much? Please explain all work.

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Four hops means that 5 routers are involved. The virtual circuit implementation requires typing up 5*8 = 40 bytes of memory for 1000 seconds.
The datagram implementation requires ...

$2.19