Question

Annual depreciation$2,500 Annual mileage 13,200Current year's loan interest$650 Miles per gallon 24Insurance$680 License and registration fees$65Average gasoline price$3.50per gallon Oil changes/repairs$370Parking/tolls$420 a. Calculate total annual operating cost of the motor vehicle.

Answer 1

Answer:

Total annual operating cost =  $6,610

Explanation:

Given;

Annual depreciation = $2,500

Annual mileage = 13,200

Current year's loan interest = $650

Miles per gallon = 24

Insurance = $680

License and registration fees = $65

Average gasoline price = $3.50 per gallon

Oil changes/repairs = $370

Parking/tolls = $420

Now,

The cost of gas for annual mileage = $\frac{13,200}{24}\times\ 3.50$

= $1,925

Thus,

Total operating cost =

   Annual depreciation                              $2,500

+ cost of gas for annual mileage              $1,925

+ loan interest                                            $650

+ Insurance                                                 $680  

+ License and registration fees                 $65

+ Oil changes/repairs                                 $370

+ Parking/tolls                                             $420

=================================================

Total annual operating cost                      $6,610