7. One of the disadvantages of leasing a car instead of buying is that you are only allowed to drive a certain number of miles for the time you lease the car (usually 2 or 3 years). If you go over your miles, you can end up owing the dealer a lot of money at the end of the lease. If you drive a lot for work, leasing a car is probably not the best option for you. Mikey’s three-year lease allowed him to drive 12,000 miles per year with a penalty of $0.20 per mile for going over his included miles. When Mikey turned in the car to the dealer, it had 38,300 miles on it. How much does Mikey owe the dealer in penalties?
it's beginning to look like a homework dump ...
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To calculate the amount that Mikey owes the dealer in penalties for going over his included miles, we first need to determine how many miles he went over the allowed amount.
Given that Mikey had a three-year lease with an annual mileage limit of 12,000 miles, we can calculate the total allowed mileage for the lease. We multiply the annual mileage limit (12,000) by the number of lease years (3):
12,000 miles/year * 3 years = 36,000 miles
So, the total allowed mileage for Mikey's lease is 36,000 miles.
To find out how many miles Mikey went over his included miles, we subtract the total allowed mileage (36,000) from the actual mileage on the car when he turned it in (38,300):
38,300 miles - 36,000 miles = 2,300 miles
Mikey went over his included miles by 2,300 miles.
Now let's calculate the penalties. The penalty rate for going over the allowed miles is $0.20 per mile. We multiply the number of excess miles (2,300) by the penalty rate ($0.20) to find the total amount owed:
2,300 miles * $0.20/mile = $460
Therefore, Mikey owes the dealer $460 in penalties for going over his included miles.