Question

Use the following formula.

A=p[(1+r/n)ⁿ t-1]/(r/n)
Suppose that you drive 50,000 miles per year and gas averages $4 per gallon.
a. What will you save in annual fuel expenses by owning a hybrid car averaging 50 miles per gallon rather than an SUV averaging 25 miles per gallon?

Answer 1

By owning a hybrid car averaging 50 miles per gallon rather than an SUV averaging 25 miles per gallon, you will save $4,000 in annual fuel expenses.

Step-by-step explanation:

Step-by-step calculation:

1. Calculate the total fuel consumed in the SUV: 50,000 miles / 25 miles per gallon = 2,000 gallons.
2. Calculate the total fuel consumed in the hybrid car: 50,000 miles / 50 miles per gallon = 1,000 gallons.
3. Calculate the annual fuel expenses for the SUV: 2,000 gallons * $4 per gallon = $8,000.
4. Calculate the annual fuel expenses for the hybrid car: 1,000 gallons * $4 per gallon = $4,000.
5. Subtract the annual fuel expenses for the hybrid car from the annual fuel expenses for the SUV: $8,000 - $4,000 = $4,000.

Therefore, you will save $4,000 in annual fuel expenses by owning a hybrid car rather than an SUV.