PS.53 Brother I.D. Ricks is a faculty member at BYU-Idaho whose grandchildren live in Oklahoma and...

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PS.53 Brother I.D. Ricks is a faculty member at BYU-Idaho whose grandchildren live in Oklahoma and California. He and his wife would like to visit their grandchildren at least once a year in these states. They currently have one vehicle with well over 100,000 miles on it, so they want to buy a newer vehicle with fewer miles and that gets better gas mileage. They are considering two options: (1) a new subcompact car that would cost $21,000 to purchase or (2) a used sedan that would cost $15,300. They anticipate that the new subcompact would get 35 miles per gallon (combined highway and around town driving) while the sedan would get 25 miles per gallon. Based on their road tripping history they expect to drive 12,000 miles per year. For the purposes of their analysis they are assuming that gas will cost $3.41 per gallon. PS.53 Brother I.D. Ricks is a faculty member at BYU-Idaho whose grandchildren live in Oklahoma and California. He and his wife would like to visit their grandchildren at least once a year in these states. They currently have one vehicle with well over 100,000 miles on it, so they want to buy a newer vehicle with fewer miles and that gets better gas mileage. They are considering two options: (1) a new subcompact car that would cost $21,000 to purchase or (2) a used sedan that would cost $15,300. They anticipate that the new subcompact would get 35 miles per gallon (combined highway and around town driving) while the sedan would get 25 miles per gallon. Based on their road tripping history they expect to drive 12,000 miles per year. For the purposes of their analysis they are assuming that gas will cost $3.41 per gallon.

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