An business development executive travels extensively for business. Her company

Question

An business development executive travels extensively for business. Her company offers two options to offset her driving expenses. Option 1 provides a car allowance of 490 dollars per month and a mileage reimbursement of $0.34/mile for fuel, insurance, and maintenance costs. Option 2 provides a mileage reimbursement of $0.73/mile to cover all expenses associated with owning a car.How many miles would she have to drive each YEAR for the two options to be of equal value. Express your answer in miles to the nearest whole mile.

Explanation / Answer

Make Option 1 and Option 2 at par to calculate the miles an business development executive would have to drive each year for these two options to be of equal value.

Therefore, equations are framed as follows:-

490 * 12 + 0.34 * A = 0.73 A [ Let A denotes miles that would have to drive each year.]

5880 + 0.34 A = 0.73 A

A = 5880 / 0.39

A = 15076.92 i.e., 15077 miles (approx)

Conclusion:-  An business development executive would have to drive each year 15077 miles for the two options to be of equal value.

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