We have two variables, a y for total cost and an x for number of miles, and we have two numbers, $.20/mile and $.70/day.
Most of the time, the y is by itself on the left side of the equation (especially if it represents a total).
If we're saying this all happens in 1 day, $.70 goes by itself too. Really we multiply .70/day by 1 day, and the "day"s cancel out.
This leaves .20/mile and x for the number of miles, which we are also going to multiply. This cancels out the miles and leaves $.20x.
Now that all our terms are in dollars (remember, y is cost, which is a unit of money), we can put stuff together.
y = .20x + .70
This is our function. Since x is not squared or cubed or anything, we know this is a straight line, so all we have to do is find two points and connect them.
The easiest points to find are when x=0, and when x=1.
When x = 0, y = .70 since the x term is equal to zero.
When x=1, y = .20 + .70 = .90
Now we have two pairs: (0, .70) and (1, .90). Graph these, and draw a straight line connecting both.
For the last part, simply choose an x value and plug it into the equation .20x + .70.
I hope this answers your question!