Answer the question.
-You currently drive 240 miles per week in a car that gets 16 miles per gallon of gas. A new fuel-efficient car costs $13,000 (after trade-in on your current car)and gets 40 miles per gallon.
Insurance premiums for the new and old car are $800 and $600 per year, respectively. You
Anticipate spending $1400 per year on repairs for the old car and having no repairs on the new car.
Assuming that gas remains at $3.50 per gallon, estimate the number of years after which the costs
Of owning the new and old cars are equal.

Question

Quizplus · Accepted Answer

First, calculate the weekly and annual gas costs for both cars. For the old car: $240 \, \text{miles} / 16 \, \text{mpg} = 15 \, \text{gallons}$, so at $3.50 per gallon, the weekly gas cost is $15 \times 3.50 = \$52.50$, and the annual cost is $52.50 \times 52 = \$2,730$. For the new car: $240 \, \text{miles} / 40 \, \text{mpg} = 6 \, \text{gallons}$, so the weekly gas cost is $6 \times 3.50 = \$21$, and the annual cost is $21 \times 52 = \$1,092$.The annual savings on gas with the new car is $2,730 - 1,092 = \$1,638$. The difference in insurance costs is $800 - 600 = \$200$, and the savings on repairs is \$1,400. So, the total annual savings with the new car is $1,638 + 200 + 1,400 = \$3,238$.The cost of the new car is \$13,000, so the break-even point is $13,000 / 3,238 \approx 4.01$ years. Since the options are given in tenths of years, the closest option is 4.6 years.

Answer the Question. -You Currently Drive 240 Miles Per Week in a Car