Question

ExpenseYearly costor rateGasInsuranceWhat is the cost permile over the course ofa year for a $20,000 carthat depreciates 20%,with costs shown in thetable, and that hasbeen driven for 10,000miles?$425.00$400.00$110,00$100.0020%OilRegistrationDepreciationB. $4.10 per mileA. $1.10 per mileC. $0.25 per mileD. $0.50 per mile

Answer 1

Step 1:

Find the depreciation

`\begin{gathered} \text{Depreciation = 20\% of \$20,000} \\ \text{Depreciation = }(20)/(100)\text{ }*\text{ \$20000} \\ \text{Depreciation = \$4000} \end{gathered}`

Step 2:

Total cost = $425 + $400 + $110 + $100 + $4000

Total cost = $5035

Final answer

`\begin{gathered} \text{Cost per mile = }(5035)/(10000) \\ \text{Cost per mile = \$0.5035} \\ \text{Cost per mile = \$0.50} \end{gathered}`

Option D $0.50 per mile