Question

Stan Moneymaker has been shopping for a new car. He is interested in a certain? 4-cylinder sedan that averages

29 miles per gallon. But the sales person tried to persuade Stan that the? 6-cylinder model of the same automobile only costs $2,500 more and is really a? "more sporty and? responsive" vehicle. Stan is impressed with the zip of the?6-cylinder car and reasons that ?$2,500 is not too much to pay for the extra power. How much extra is Stan really paying if the? 6-cylinder car averages 20 miles per? gallon? Assume that Stan will drive either automobile 103,000

?miles, gasoline will average ?$3.17 per? gallon, and maintenance is roughly the same for both cars. State other assumptions you think are appropriate.

Answer 1

Let's calculate the overall cost if Stan purchases the 4-cylinder sedan

The 4-cylinder vehicle averages 29 miles per gallon and Stan will drive a total of 103,000 miles.

Hence,the average miles that Stan will drive in total=103,000miles/29miles=3551.72 gallons approximately

The per gallon gasoline costs $3.17.Hence,Stan's estimated cost of gasoline from 4 cylinder vehicle=($3.17*3551.72miles)=$11,258.96 approximately

Now let's examine Stan's overall cost from the 6 cylinder model

The 6 cylinder model provides an average of 20 miles per gallon and Stan would travel a total of 103,000 miles on this one as well.

Therefore,the average gallon that Stan will use from 6 cylinder model=103,000miles/20miles=5150 gallons

Again,the cost of per gallon gasoline is $3.17 and thus Stan's total gasoline expense from the 6 cylinder model=($3.17*5150gallons)=$16,325.5

Notice that Stan will apready pay an additional $2500 if he decides to purchase the 6 cylinder model and difference in the overall gasoline expense between the 4 cylinder and the 6 cylinder model=($16,325.5-$11,258.96)=$5066.54.Therefore,including the purchasing cost and the overall gasoline expense Stan will pay an extra of=($5066.54+$2500)=$7566.54 if he prefers the 6 cylinder model over the 4 cylinder sedan.

Note:In this instance we are assuming that maintenace cost and other technical factors such as engine capacity,battery performance/lifespan,internal driving features(break,accelerator,gear) etc. are roughly same for both the models.If there is/are any difference/s in the technical features of both the models it will expectedly cause a variation between the maintenance and operating cost of the cars as well.