A SIMULATION FONTINTED) Maintenance, Depreciation, and Other Costs A car depreciates in value most rapidly when it is new. You can estimate how a car will depreciate by looking at the values of older cars of the same model. Depreciation is often expressed as a percent of the purchase price. Maintenance and repair costs tend to increase as a car ages. You can estimate these costs by talking with mechanics and with people who own the same model. Consumer and automobile magazines sometimes have articles comparing these costs for various models. 20. The Volney should lose 18% of its purchase price (less tax) the first year, 15% of its purchase price (less tax) the second year, and 12% the third year. What is the total percent? How much less will the Volney be worth in three years? What is the average depreciation per month? 21. The Jess can be expected to have a value of $2094 in three years. What is the depreciation per month? 22. For the Volney, you expect to spend $100 the first year, $160 the second year, and S480 the third year for maintenance and repairs. What is the average cost per month? 23. You expect the Jess to have maintenance and repair costs of $440 the first year, S560 the second year, and $750 the third year. It will also need tires for $250 plus 6% sales tax. What is the average cost per month 24. You plan to drive 12,000 miles per year. Gasoline costa $1.259 per gallon. The Volney gets 30 miles per gallon. What is the cost of gasoline per month? 25. The Jess gets 25 miles per gallon. What is the cost of gasoline per month? 26. Make a table like this one to compare the monthly costs of the cars. Volney Jess ? ? Fixed Costs 2 Monthly cost Finance charge Insurance Depreciation License and registration Gasoline Maintenance, repairs, tires TOTAL Cost per Mile $3.90 2 $3.90 2 Variable Costs ? ? ? 2 264 Unit 8 Automobile Transportation A SIMULATION FONTINTED) Maintenance, Depreciation, and Other Costs A car depreciates in value most rapidly when it is new. You can estimate how a car will depreciate by looking at the values of older cars of the same model. Depreciation is often expressed as a percent of the purchase price. Maintenance and repair costs tend to increase as a car ages. You can estimate these costs by talking with mechanics and with people who own the same model. Consumer and automobile magazines sometimes have articles comparing these costs for various models. 20. The Volney should lose 18% of its purchase price (less tax) the first year, 15% of its purchase price (less tax) the second year, and 12% the third year. What is the total percent? How much less will the Volney be worth in three years? What is the average depreciation per month? 21. The Jess can be expected to have a value of $2094 in three years. What is the depreciation per month? 22. For the Volney, you expect to spend $100 the first year, $160 the second year, and S480 the third year for maintenance and repairs. What is the average cost per month? 23. You expect the Jess to have maintenance and repair costs of $440 the first year, S560 the second year, and $750 the third year. It will also need tires for $250 plus 6% sales tax. What is the average cost per month 24. You plan to drive 12,000 miles per year. Gasoline costa $1.259 per gallon. The Volney gets 30 miles per gallon. What is the cost of gasoline per month? 25. The Jess gets 25 miles per gallon. What is the cost of gasoline per month? 26. Make a table like this one to compare the monthly costs of the cars. Volney Jess ? ? Fixed Costs 2 Monthly cost Finance charge Insurance Depreciation License and registration Gasoline Maintenance, repairs, tires TOTAL Cost per Mile $3.90 2 $3.90 2 Variable Costs ? ? ? 2 264 Unit 8 Automobile Transportation
