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  3. b. your friend is thinking about buying a new car,

b. Your friend is thinking about buying a new car, and is considering between the...

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Accounting

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b. Your friend is thinking about buying a new car, and is considering between the regular model or the hybrid model. The regular model costs $17,000, while the hybrid model costs $26,500. She expects to own this car (both models) for 14 years. The determining factor on which car she will get is the amount of miles she will drive per year. The dealership estimates that the annual cost of gas for the regular model to be 50 cents per mile. The annual cost of gas for the hybrid model is 30 cents per mile. Using a timeframe of the entire life of the car, and assuming an interest rate of 7%, compute the number of miles that your friend must drive per year to justify the cost of the hybrid car. Ans: 4574.04 miles/year

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