Find the break even point, where the cost is the same for the two companies.

Question

One car-rental company charges $42 per day with unlimited mileage. Another company charges $30 per day plus .15 cents per mile. You need to rent a car for a three-day trip. Find the break even point, where the cost is the same for the two companies.

Answers:

a. 120 miles

b. 200 miles

c. 240 miles

d. 300 miles

Answer 1

There is an error in the question; 0.15 cents should have been 0.15 dollars (or 15 cents)

 

Let the break even number of miles be x

 

Revenue for Company 1; $42 per day * 3 days = $126

 

Revenue for Company 2; $30 per day * 3 days + $0.15 per mile *x miles

 

comparing both; 126 = 90 + 0.15x

 

x = 36/0.15 = 240 miles (C)