Nothing is wrong with my math. You are on the other hand failing to take all the variables into account. If you keep your computer 2 years there will be a new rev out meaning a big price cut on the used market, keeping it for 3 years means its 2 revs old meaning a even bigger price cut. If you want to count that the AC makes it so you can switch after 3 years you need to include the additional variables.
In the three year lifespan of an AC contract... you are essentially claiming the saving of ~$1600 in the ~4 AC contracts that you did not purchase (8-11 month intervals). That is an overrepresentation of your savings. Someone who bought a laptop and kept it 3 years would have only purchased one contract. Someone who kept a laptop for 4 years would have still bought one contract, but would have run the risk of an earlier than planned replacement in the event of a catastrophic failure in the final year.
/Jim