Question

Based on the information presented what do think Manny should decide? Option #1: Keep the old car Option #2: Buy the fuel-efficient used car Option # Number

Answer 1

Answer:

Manny should keep the old car since he gets to spend less on it in three years compared to getting the fuel-efficient car.

Step-by-step explanation:

Step 1:

Number of miles Manny commutes per week = 160

Cost per gallon of gasoline. = $2.9

Mileage of old car = 20 miles per gallon

Maintenance cost per year of old car = $760

Cost of new car = $7000

Maintenance cost per month of new car = $10

Mileage of new car = 31 miles per gallon

Step 2:

There are 52 weeks in a year. Total distance Manny will commute in 3 years = 160 * 52 * 3 = 24960 miles

Maintenance cost of old car in 3 years = $760 * 3 = $2280

Maintenance cost of new car in 3 years = $10/month * 12 months * 3 = $360

Gasoline usage of old car in 3 years = 24960 miles/20 miles per gallon = 1248 gallons

Cost of gasoline = 1248 * $2.9 = $3619.2

Gasoline usage of new car in 3 years = 24960 miles/31 miles per gallon

Cost of gasoline = $2.9 * 24960 miles/31 miles per gallon = $2334.97 or approximately $2335

Step 3:

Total expenditure on old car for 3 years = $2280 + $3619.2 = $5899.2

Total expenditure on new car for 3 years = $7000 + $360 + $2335 = $9695

From the calculations above, Manny will spend $5899.2 on the old car compared to $9695 on the new car in three years.

Therefore, Manny should keep the old car since he gets to spend less on it in three years compared to getting the fuel-efficient car.