QuestionDetails: You are looking at a new car and dont know whether to buyconvec
ID: 2770873 • Letter: Q
Question
QuestionDetails: You are looking at a new car and dont know whether to buyconvectional or hybrid. The fact are as follows Conventional Hybrid Cost 22,000 27,000 Trade in value in 5years 13000 16,000 Annual opeartingcost 1,500 1,700 Cost permile .40 .30 interest 6% How many miles per year do you have to drive to make thehybrid break even? QuestionDetails: You are looking at a new car and dont know whether to buyconvectional or hybrid. The fact are as follows Conventional Hybrid Cost 22,000 27,000 Trade in value in 5years 13000 16,000 Annual opeartingcost 1,500 1,700 Cost permile .40 .30 interest 6% How many miles per year do you have to drive to make thehybrid break even?Explanation / Answer
cost per year of conventional car :22000-13000=9000/5=1800 interest at 6% 22000=1320 annual oper cost=1500 cost per mile .4 :
cost per year of hybrid 27000-16000=11000/5=2200 interest at 6% 27000=1620 annual oper cost =1700 cost per mle .3 :
let x be the number of miles :
1320+1800+1500+.4x=2200+1700+1620+.3x :
4620+.4x=5520+.3x : .1x=900 : x=9000 miles per year
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