Subjects financial math

Car Cost Comparison

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Car Cost Comparison


1. **Stating the problem:** We need to compare two options for acquiring a car over 12 months. Option A: Buy the car for 6000 and sell it back for 4500 after 12 months. Option B: Rent the car monthly at 135 with a 19% discount on the rental price. 2. **Calculate the net cost for Option A:** The net cost is the initial purchase price minus the resale value after 12 months. $$\text{Net cost}_A = 6000 - 4500 = 1500$$ 3. **Calculate the monthly rental price after discount for Option B:** The discount is 19% of 135. $$\text{Discount} = 0.19 \times 135 = 25.65$$ So, the discounted monthly rental price is: $$\text{Monthly rental price} = 135 - 25.65 = 109.35$$ 4. **Calculate the total rental cost for 12 months in Option B:** $$\text{Total rental cost}_B = 109.35 \times 12 = 1312.20$$ 5. **Compare the two options:** Option A costs 1500 over 12 months. Option B costs 1312.20 over 12 months. 6. **Conclusion:** Option B is cheaper by: $$1500 - 1312.20 = 187.80$$ Therefore, Option B is the better financial choice over 12 months.