You currently drive 288 miles per week in a car that gets 24 miles per gallon of gas. You are considering buying a new fuel-efficient car for $15,000 (after trade-in on your current car) that gets 48 miles per gallon. Insurance premiums for the new and old car are $800 and $600 per year, respectively. You anticipate spending $1000 per year on repairs for the old car and having no repairs on the new car. Assume gas costs $3.50 per gallon. Over a
five-year period, is it less expensive to keep your old car or buy the new car? By how much?
bro we just gonna have to take this F because aint nobody giving us the answers
To determine whether it's less expensive to keep your old car or buy the new car over a five-year period, we need to compare the costs of owning each car.
For the old car:
1. Calculate the annual fuel cost:
- Divide the total mileage driven in a week by the car's fuel efficiency: 288 miles / 24 miles per gallon = 12 gallons per week.
- Multiply the weekly fuel consumption by the cost of gas: 12 gallons * $3.50 per gallon = $42 per week.
- Multiply the weekly fuel cost by the number of weeks in a year: $42 * 52 weeks = $2,184 per year.
2. Calculate the annual insurance cost: $600 per year.
3. Calculate the annual repair cost: $1,000 per year.
4. Calculate the total annual cost of owning the old car: $2,184 (fuel cost) + $600 (insurance cost) + $1,000 (repair cost) = $3,784 per year.
For the new car:
1. Calculate the annual fuel cost:
- Divide the total mileage driven in a week by the new car's fuel efficiency: 288 miles / 48 miles per gallon = 6 gallons per week.
- Multiply the weekly fuel consumption by the cost of gas: 6 gallons * $3.50 per gallon = $21 per week.
- Multiply the weekly fuel cost by the number of weeks in a year: $21 * 52 weeks = $1,092 per year.
2. Calculate the annual insurance cost: $800 per year.
3. Calculate the total annual cost of owning the new car: $1,092 (fuel cost) + $800 (insurance cost) = $1,892 per year.
Now, let's calculate the total cost over a five-year period for each car:
Old car: $3,784 (annual cost) * 5 years = $18,920.
New car: $1,892 (annual cost) * 5 years = $9,460.
Therefore, it is less expensive to buy the new car by $18,920 - $9,460 = $9,460 over a five-year period.