Suppose you want to buy a new car and trying to choose between two models: Model A:...

50.1K

Verified Solution

Question

Basic Math

Suppose you want to buy a new car and trying to choose betweentwo models:
Model A: costs $17,000 and its gas mileage is 20 miles pergallon and its insurance is $200 per year.
Model B: costs $25,000 and its gas mileage is 35 miles pergallon and its insurance is $400 per year.
If you drive approximately 40,000 miles per year and the gascosts $3 per gallon:
Find a formula for the total cost of owning Model A where thenumber of years is the independent variable.
Find a formula for the total cost of owning Model B where thenumber of years is the independent variable.
Find the total cost for each model for the first five years.
If you plan to keep the car for four years, which model is moreeconomical? How about if you plan to keep it for six years?
Find the number of years in which the total cost to keep the twocars will be the same.
Identify the number of months where neither car holds a cost ofownership advantage.
What effect would the cost of gas doubling have on cost ofownership? Graph or show hand calculations.
If you can sell neither car for 40% of its value at any time,how does the analysis change? Graph or show hand calculations.

Answer & Explanation Solved by verified expert

4.4 Ratings (947 Votes)

Let x be the number of years and y the total cost of owning Model A or B i The insurance cost for model A is 200x and the cost of gas is 3x4000020 6000x Hence the total cost of owning Model A for x years is 17000 200x 6000x 6200x17000 ii The insurance cost for model A is 400x and the cost of gas is 3x4000035 342857x on rounding off to 2 decimal places Hence the total cost of owning Model B for x years is 25000 400x 342857x 25000 382857x iii The total cost of owning Model A See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member