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Paul [167]
3 years ago
9

You are considering two cars that you plan on keeping for 5 years. One has an EPA combined city and highway rating of 33 mpg. Th

e second has an EPA rating of 36 mpg. Suppose gasoline costs $3.41 per gallon and you drive 10,000 miles each year.
(a) How much (in dollars) will you save in 1 year by purchasing the 36 mpg car? (Enter a number. Round your answer to the nearest cent.)

(b) If you deposit that amount at the end of each year for the 5 years of ownership into an account that earns 4.1% compounded annually, how much (in dollars) will you save over 5 years? (Enter a number. Round your answer to the nearest cent.)
Mathematics
1 answer:
amid [387]3 years ago
6 0

Answer:

a) $86.11

b) $467.33

Step-by-step explanation:

no. of gallons saved 'n' per year

n = (10000/33) - (10000/36)

n = 2500/99

Amount saved = 3.41×n = 3.41×2500/99

= $86.11

b) over 5 years:

86.11( 1 + (1.041) + (1.041)² + (1.041)³ + (1.041)⁴ )

= 86.11(5.427157431)

= $467.33

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