Engineering Economy 7th Edition by Leland Blank ,Anthony Tarquin

Exercise 24

The National Highway Traffi c Safety Administration raised the average fuel effi ciency standard to35.5 miles per gallon for cars and light trucks by the year 2016. The rules will cost consumers an average of $434 extra per vehicle in the 2012 model year. If a person purchases a new car in 2012 and keeps it for 5 years, how much must be saved in fuel costs each year to justify the extra cost Use an interest rate of 8% per year.