diff --git a/.rspec b/.rspec
new file mode 100644
index 0000000..c99d2e7
--- /dev/null
+++ b/.rspec
@@ -0,0 +1 @@
+--require spec_helper
diff --git a/Gemfile b/Gemfile
new file mode 100644
index 0000000..6f7eadc
--- /dev/null
+++ b/Gemfile
@@ -0,0 +1,4 @@
+source "https://rubygems.org"
+
+gem "rake"
+gem "rspec"
\ No newline at end of file
diff --git a/Gemfile.lock b/Gemfile.lock
new file mode 100644
index 0000000..d29dca2
--- /dev/null
+++ b/Gemfile.lock
@@ -0,0 +1,28 @@
+GEM
+  remote: https://rubygems.org/
+  specs:
+    diff-lcs (1.4.4)
+    rake (13.0.6)
+    rspec (3.10.0)
+      rspec-core (~> 3.10.0)
+      rspec-expectations (~> 3.10.0)
+      rspec-mocks (~> 3.10.0)
+    rspec-core (3.10.1)
+      rspec-support (~> 3.10.0)
+    rspec-expectations (3.10.1)
+      diff-lcs (>= 1.2.0, < 2.0)
+      rspec-support (~> 3.10.0)
+    rspec-mocks (3.10.2)
+      diff-lcs (>= 1.2.0, < 2.0)
+      rspec-support (~> 3.10.0)
+    rspec-support (3.10.2)
+
+PLATFORMS
+  x86_64-darwin-20
+
+DEPENDENCIES
+  rake
+  rspec
+
+BUNDLED WITH
+   2.2.27
diff --git a/bin/setup b/bin/setup
new file mode 100755
index 0000000..ca54199
--- /dev/null
+++ b/bin/setup
@@ -0,0 +1,10 @@
+#!/usr/bin/env sh
+
+# Run this script immediately after cloning the codebase.
+# https://github.com/thoughtbot/guides/tree/master/protocol
+
+# Exit if any subcommand fails
+set -e
+
+# Set up Ruby dependencies via Bundler
+bundle install
\ No newline at end of file
diff --git a/lib/phone_plan.rb b/lib/phone_plan.rb
new file mode 100644
index 0000000..f7e9eda
--- /dev/null
+++ b/lib/phone_plan.rb
@@ -0,0 +1,30 @@
+class PhonePlan
+  def initialize(number_of_phones:, price:, type:)
+    @number_of_phones = number_of_phones
+    @price = price
+    @type = type
+  end
+
+  def cost
+    if type == "individual"
+      number_of_phones * price
+    elsif type == "family"
+      number_of_extra_phones = number_of_phones - 1
+      cost_per_extra_phone = 10
+
+      price + (number_of_extra_phones * cost_per_extra_phone)
+    elsif type == "business"
+      subtotal = number_of_phones * price
+
+      if number_of_phones < 50
+        subtotal * 0.75
+      else
+        subtotal * 0.50
+      end
+    end
+  end
+
+  private
+
+  attr_reader :number_of_phones, :price, :type
+end
\ No newline at end of file
diff --git a/spec/phone_plan_spec.rb b/spec/phone_plan_spec.rb
new file mode 100644
index 0000000..f6c97f1
--- /dev/null
+++ b/spec/phone_plan_spec.rb
@@ -0,0 +1,51 @@
+require "spec_helper"
+
+describe PhonePlan do
+  describe "#cost" do
+    context "when it is the individual plan" do
+      it "multiples the price by the number of phones" do
+        phone_plan = PhonePlan.new(
+          number_of_phones: 3,
+          price: 40,
+          type: "individual"
+        )
+        expect(phone_plan.cost).to eq 120
+      end
+    end
+
+    context "when it is the family plan" do
+      it "discounts each additional phone" do
+        phone_plan = PhonePlan.new(
+          number_of_phones: 3,
+          price: 40,
+          type: "family"
+        )
+        expect(phone_plan.cost).to eq 60
+      end
+    end
+
+    context "when it is the business plan" do
+      context "when there are fewer than 50 phones" do
+        it "returns the price with a 25% discount" do
+          phone_plan = PhonePlan.new(
+            number_of_phones: 3,
+            price: 40,
+            type: "business"
+          )
+          expect(phone_plan.cost).to eq 90
+        end
+      end
+
+      context "when there are 50 or more phones" do
+        it "returns the price with a 50% discount" do
+          phone_plan = PhonePlan.new(
+            number_of_phones: 51,
+            price: 40,
+            type: "business"
+          )
+          expect(phone_plan.cost).to eq 1020
+        end
+      end
+    end
+  end
+end
\ No newline at end of file
diff --git a/spec/spec_helper.rb b/spec/spec_helper.rb
new file mode 100644
index 0000000..7f3d52e
--- /dev/null
+++ b/spec/spec_helper.rb
@@ -0,0 +1,106 @@
+# This file was generated by the `rspec --init` command. Conventionally, all
+# specs live under a `spec` directory, which RSpec adds to the `$LOAD_PATH`.
+# The generated `.rspec` file contains `--require spec_helper` which will cause
+# this file to always be loaded, without a need to explicitly require it in any
+# files.
+#
+# Given that it is always loaded, you are encouraged to keep this file as
+# light-weight as possible. Requiring heavyweight dependencies from this file
+# will add to the boot time of your test suite on EVERY test run, even for an
+# individual file that may not need all of that loaded. Instead, consider making
+# a separate helper file that requires the additional dependencies and performs
+# the additional setup, and require it from the spec files that actually need
+# it.
+#
+# See http://rubydoc.info/gems/rspec-core/RSpec/Core/Configuration
+PROJECT_ROOT = File.expand_path("../..", __FILE__)
+
+Dir.glob(File.join(PROJECT_ROOT, "lib", "*.rb")).each do |file|
+  require file
+end
+
+RSpec.configure do |config|
+  # rspec-expectations config goes here. You can use an alternate
+  # assertion/expectation library such as wrong or the stdlib/minitest
+  # assertions if you prefer.
+  config.expect_with :rspec do |expectations|
+    # This option will default to `true` in RSpec 4. It makes the `description`
+    # and `failure_message` of custom matchers include text for helper methods
+    # defined using `chain`, e.g.:
+    #     be_bigger_than(2).and_smaller_than(4).description
+    #     # => "be bigger than 2 and smaller than 4"
+    # ...rather than:
+    #     # => "be bigger than 2"
+    expectations.include_chain_clauses_in_custom_matcher_descriptions = true
+  end
+
+  # rspec-mocks config goes here. You can use an alternate test double
+  # library (such as bogus or mocha) by changing the `mock_with` option here.
+  config.mock_with :rspec do |mocks|
+    # Prevents you from mocking or stubbing a method that does not exist on
+    # a real object. This is generally recommended, and will default to
+    # `true` in RSpec 4.
+    mocks.verify_partial_doubles = true
+  end
+
+  # This option will default to `:apply_to_host_groups` in RSpec 4 (and will
+  # have no way to turn it off -- the option exists only for backwards
+  # compatibility in RSpec 3). It causes shared context metadata to be
+  # inherited by the metadata hash of host groups and examples, rather than
+  # triggering implicit auto-inclusion in groups with matching metadata.
+  config.shared_context_metadata_behavior = :apply_to_host_groups
+
+# The settings below are suggested to provide a good initial experience
+# with RSpec, but feel free to customize to your heart's content.
+=begin
+  # This allows you to limit a spec run to individual examples or groups
+  # you care about by tagging them with `:focus` metadata. When nothing
+  # is tagged with `:focus`, all examples get run. RSpec also provides
+  # aliases for `it`, `describe`, and `context` that include `:focus`
+  # metadata: `fit`, `fdescribe` and `fcontext`, respectively.
+  config.filter_run_when_matching :focus
+
+  # Allows RSpec to persist some state between runs in order to support
+  # the `--only-failures` and `--next-failure` CLI options. We recommend
+  # you configure your source control system to ignore this file.
+  config.example_status_persistence_file_path = "spec/examples.txt"
+
+  # Limits the available syntax to the non-monkey patched syntax that is
+  # recommended. For more details, see:
+  #   - http://rspec.info/blog/2012/06/rspecs-new-expectation-syntax/
+  #   - http://www.teaisaweso.me/blog/2013/05/27/rspecs-new-message-expectation-syntax/
+  #   - http://rspec.info/blog/2014/05/notable-changes-in-rspec-3/#zero-monkey-patching-mode
+  config.disable_monkey_patching!
+
+  # This setting enables warnings. It's recommended, but in some cases may
+  # be too noisy due to issues in dependencies.
+  config.warnings = true
+
+  # Many RSpec users commonly either run the entire suite or an individual
+  # file, and it's useful to allow more verbose output when running an
+  # individual spec file.
+  if config.files_to_run.one?
+    # Use the documentation formatter for detailed output,
+    # unless a formatter has already been configured
+    # (e.g. via a command-line flag).
+    config.default_formatter = "doc"
+  end
+
+  # Print the 10 slowest examples and example groups at the
+  # end of the spec run, to help surface which specs are running
+  # particularly slow.
+  config.profile_examples = 10
+
+  # Run specs in random order to surface order dependencies. If you find an
+  # order dependency and want to debug it, you can fix the order by providing
+  # the seed, which is printed after each run.
+  #     --seed 1234
+  config.order = :random
+
+  # Seed global randomization in this process using the `--seed` CLI option.
+  # Setting this allows you to use `--seed` to deterministically reproduce
+  # test failures related to randomization by passing the same `--seed` value
+  # as the one that triggered the failure.
+  Kernel.srand config.seed
+=end
+end