Car problems

Question

Car costs $30,000 and get 55 miles per gallon. A comparable car costs 22,000 and gets 25 miles per gallon. Consumer A drives 125 miles a week. Consumer B drives 500 miles a week. How many years would each consumer need to drive the car before fuel savings justify the higher price?

Answer 1

T,

This question is totally dependent upon the price of gas. While the problem presents a fixed number of miles driven, the cost of driving those miles depends on whether gas is 2$/gal or 5$/gal. Further complicating the question is the cost of maintenance. But if we ignore that for now, Driver A drives 6500 miles a year, Driver B 26000 miles a year. That alone tells us that driver B will make up the difference 4 times as fast.

 

To find the cost of gas per year, multiply the annual miles by the price per gallon, and divide by the miles per gallon.

If gas is 2$/gal, the difference between 25mpg and 55mpg is $283.64. Dividing into the $8000 cost difference, it would take over 28 years for Driver A. But if gas were 3$/gal, it would take only 19 years.

 

Driver B, on the other hand, would take 7 years at 2$/gal but under 5 years at 3$/gal.