Question

You are buying a new car. Car option "A" gets 18 miles per gallon of gas (MPG) and has a monthly payment of $368. Car option "B" is a hybrid and gets 60 MPG with a monthly payment of $409. Gas costs $2.89 per gallon. You drive an average of 12,000 miles per year. What is the annual difference in the cost between the two cars in gasoline plus monthly payment per month?

Answer 1

=$856.67

Step-by-step explanation:

Car option A

The total costs of option A for one year

Monthly repayment : $368 x 12 = $ 4,416

Gas

Consumption at 18 miles per gallons, for 12,000 miles

the consumption will be 12,000 / 18 = 666.67 gallons

cost of gas consumed : $2.89 x 666.67 = $1,926.67

The total cost of Car Option " A " is monthly repayments plus the cost of gas

=$ 4,416 + $1,926.67

=$ 6,342.67

Car option B

The total annual cost for car option B

monthly repayments :$409 x 12 = $ 4,908

cost of gas: consumption 60 per gallons, for 12,000miles

=12,000 /60 =200 gallons

cost of gas: 200 x $2.89= $578

Total cost for car option B

=$ 4,908 + $578

=$ 5,486

Annual difference :

=$6,342.67 - $5,486

=$856.67