Question

suppose that a certain car has the following average operating and ownership costs.
average costs per mile
operating: $0.24
ownership: $0.72
total: $0.96
a. if you drive 30,000 miles per year, what is total annual expense for this car?
b. if the total annual expense for this car is deposited at the end of each year into an ira paying 8.5% compounded yearly, how much will be saved at the end of six years? use the formula $a = p \left \frac{\left(1 + \frac{r}{n}\
ight)^{nt} - 1}{\frac{r}{n}} \
ight$
a. if you drive 30,000 miles per year, the total annual expense for this car is $\square$. (round to the nearest dollar as needed.)

Explanation:

Step1: Calculate total annual expense

The total cost per mile is the sum of operating and ownership cost. So, total cost per mile \(c = 0.24+0.72=0.96\) dollars per mile.
If you drive \(d = 30000\) miles per year, then the total annual expense \(E\) is given by the formula \(E=c\times d\).
Substitute \(c = 0.96\) and \(d = 30000\) into the formula: \(E=0.96\times30000\).

Step2: Perform the multiplication

\(E = 0.96\times30000=(1 - 0.04)\times30000=30000-0.04\times30000\).
First, calculate \(0.04\times30000 = 1200\). Then \(30000-1200=28800\).

Answer:

\(28800\)