Question

William Meyer has driven his used car 16,789 miles since purchasing it for $6,500 two years ago. He has spent $1,299.00 for gas, $160 for oil changes, $209 for maintenance, and $200 for tires. He paid $657 for insurance, and $158 for the registration and license. What was the cost per mile for William to operate and maintain his car taking into consideration that is has depreciated by $2,100?
So i know that
cost per mile=(Annual variable price cost +Annual fixed cost) divided by number of miles driven .
So i think cost per mile=(1868+815) divided by 16789 = 0.1598
Is the answer $0.16 ?

Answer 1

I believe you're asked here to find the price per mile over the 2-yeqr ownership period. You may take the expenses as totals for the 2-year period, not needing to convert them to cost-per year.

This car owner will probably keep (not junk) his car afer 2 years. Thus, I'd count the $2100 depreciation over two years as an expense, but not the original cost of the car.

Car purchase: $6,500
Depreciation: 2,100
------
$4.400: Value of car after 2 years

Expenses over this 2 year period were
Depreciation: $2,100
Gas
Oil changes
Insurance
and so on

Add these together and then divide your sum by the nmber of miles driven, 16789.

this is my interpretation of what is called for.

What do you think?

Answer 2

So all the expenses( including depreciation) added together are 4783
So the answer is 4783 divided by 16789
Which equals about $0.28

That sounds right to me. Thanks for the help! :)