Ethanol blended with gasoline can be used to power a ‘flex-fueled’ car or truck.

Question

Ethanol blended with gasoline can be used to power a ‘flex-fueled’ car or truck.E85 is a ethanol blended fuel, which is 85% ethanol and 15% gasoline.E85 is 80% cleaner burning than gasoline alone.However, a flex-fueled vehicle costs $1,000 more than a conventional gasoline-fueled vehicle.Additionally, E85 fuel gets 10% less miles per gallon than a conventionally fueled vehicle.Dr. Gilberti is considering a truck that can use either E85 or traditional gasoline.The truck would average about 19 miles per gallon (i.e., city and highway driving) with gasoline.If Dr. Gilberti keeps the truck for at least 198,000 miles before trade-in, how much will the E85 fuel have to cost per gallon to make the flex-fuel as economically attractive as conventional fuel?Assume current price of gas is $2.59 per gallon.

Explanation / Answer

Miles rating of gasoline car = 19 miles/gallon

Miles rating of E85 car = 17.1 miles/gallon

Fuel needed for 198000 miles for Gasoline car = 198000/19 =

10421.05 gallons

Fuel needed for 198000 miles for E85 car = 198000/17.1 = 11578.94 gallons

Fuel cost for Gasoline car= 10421.05 x $2.59 = $26990.51

Fuel cost for E85 car = 11578.94 x X where X is the cost of E85 fuel per gallon

E85 costs $1000 more than Gasoline car.

Therefore, Fuel cost of E85 car should match Fuel cost of gasoline car

11578.94X+1000=26990.51

X=(26990.51-1000)/11578.94 = $0.46

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