a) $4533.33 b)$8095.83 c) $0.67 per mile
1) Let's begin by writing down the formulas we are going to need for this problem:
Depreciation
[tex]D=\frac{Purchase\: Price - Today\: Value}{Years\: Owned}[/tex]And the cost per mile can be found using this:
[tex]C=\frac{Annual\: Variable\: Cost+\: Annual \: fixed\: cost}{Number \: of \: miles}[/tex]2) Now, let's plug into those formulas, the data we were told in the question.
Firstly, let's find the Depreciation.
a)
[tex]\frac{33500-19900}{3}=\frac{13600}{3}=4533.33[/tex]So that car suffered a depreciation of $4533.33 per period of 3 years
b) Annual fixed Costs
Let's add up all the fixed costs Dee Dee had to afford:
[tex]2350+132.50+1080+4533.33=8095.83[/tex]Note that all the costs (loan, registration ) and the depreciation comes as a fixed cost annually charged. So the fixed costs were $8,095.83
c) Cost per mile
We can find that using the 2nd formula above (on #1) note that the cost per mile is given as a ratio per the number of miles that were driven. So we've got:
[tex]C=\frac{995.60+8095.83}{13,540}=0.671\approx0.67[/tex]So the cost per mile is $0.67or 67 cents
