Financial Algebra

Question

Home heating oil is sold by the gallon. Last winter, the Romano family used 370 gallons of oil at a price of $3.91 per gallon. If the price increases 9% next year, what will their approximate heating expense be? Round to the nearest ten dollars.

Answer 1

Hi Yessica,

First we can determine the price increase using the 9% increase:

9%of $3.91 = 0.09 • 3.91 = 0.35

The price of one gallon will increase by $0.35.

Therefore, the new price will be $3.91 + 0.35 = $4.26 for one gallon.

Assuming they will still buy 370 gallons, the new price will be $4.26 • 370 = $1576.20

Rounding the total expense to the nearest ten dollars gives $1580 as a total expense.