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Car “A” cost $43,000 and gets 48 miles per gallon, while car “B” cost $24,000 and gets 23 miles per gallon. Assume you drive 12,000 miles per year and gas cost $2.42 per gallon. How many years will it take for car “A’s” better fuel economy to outweigh its higher initial cost?

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sqdancefan

The annual difference in gas cost is

... 12000(1/23 -1/48)×$2.42 ≈ $657.61

So, it will take (43,000 -24,000)/657.61 years ≈ 28.9 years for the better fuel economy to outweigh the initial cost difference.

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With the units where you can see them, the gas cost computation is ...

[tex]12000\,mi\times\left(\dfrac{1\,gal}{23\,mi}-\dfrac{1\,gal}{48\,mi}\right)\times \dfrac{\$2.42}{1\,gal}\approx \$657.609[/tex]

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