Cost of Driving

You decide to purchase a NEW car.  You have \$2000 as a down payment and will finance the remainder at 3% for 4 years. A hybrid uses less gasoline but the initial cost is higher than a comparable conventional car.  Compare the cost of owning each car, then answer the questions.

 Hybrid Conventional Price of Car \$23,193.00 \$18,821.00 Tax \$1,275.62 \$1035.15 Down Payment \$2,000.00 \$2,000.00 Loan Amount \$18,468.52 \$17,856.15 Payment (Monthly for 48 months) \$497.33 \$395.23

Fuel Costs

In addition to the down payment and monthly payments, you must purchase gasoline, insurance and maintenance items.  If you drive 15,000 miles each year, what is the total cost of gasoline for each car?  Assume gasoline will cost \$3.75/gallon.

 Hybrid Conventional Miles/gallon 48 36 Miles 15,000 15,000 Gasoline/gallon \$3.75 \$3.75 Annual cost of fuel

Other Costs

In addition to payments and fuel, you must also insure and maintain your car.

 Hybrid Conventional Insurance \$995.00 \$1005.00 Maintenance/Repair \$3500.00 \$3600.00 Annual other costs

Values from Kelly Blue Book

Create Formulas

Create a function for the annual cost of each car.  Note that the cost is different for the first 4 years (when you are making payments). Let h(x) be the function for the hybrid and c(x) the cost of the conventional car. (2 points)

Create a table
Create a table from the formulas your created above.(2 points)

 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Hybrid Convential

Graph the data
The year horizontal axis is labeled with the year.  Choose an appropriate scale for the vertical axis and label.  Then plot and label both functions on the same graph below.(2 points)

Questions

1. What have you invested in each car after 4 years? (1 point)
2. In what year is the total cost of the cars the same? (2 points)
3. If you could purchase the cars without financing, what would be their cost functions? (2 point)
4. Without financing, in what year is the total cost of the cars the same? (1 points)
5. Which car would you purchase and why? (1 points)

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