Question

A used car costs $5000 you drive it for 4 years. You drive 10,000 miles per year. Your car insurance is $1,200 per year. You spend $400 on maintenance. Gas costs $4 and the car gets 25 miles per gallon. What is the average cost per mile over the 4 years?

Answer 1

$0.445 per mile

Step-by-step explanation:

Calculation for what the average cost per mile

will be over the 4 years

First step is to calculate the Insurance cost

Insurance cost = $1,200 x 4

Insurance cost = $4,800

Second Step is to calculate the Maintenance cost

Maintenance cost = $400 x 4

Maintenance cost = $1,600

Third Step is to calculate the Total mileage

Total mileage = 10,000 miles per year x 4 years Total mileage= 40,000 miles

Fourth step is to calculate the Gas cost

Gas cost =( 1 gallon/25 miles per gallon x 40,000 miles)x $4 per gallon

Gas cost = 1,600 gallons x $4 per gallon

Gas cost=$6,400

Last step is to calculate the average cost using this formula

Average cost =Initial cost+Insurance cost+Maintenance cost +Gas cost/Total mileage

Let plug in the formula

Average cost = $5,000 + $4,800 + $1,600 + $6,400/40,000 mile

Average cost= $17,800 / 40,000 miles

Average cost = $0.445 per mile

Therefore what the average cost per mile

will be over the 4 years will be $0.445 per mile