A businesswoman wants to determine the difference between th

A businesswoman wants to determine the difference between the costs of owning and leasing an automobile. She can lease a car for $480 per month (on an annual basis). Under this plan, the cost per mile is $0.08. If she were to purchase the car, the fixed annual expense would be $4500 and other costs would amount to $0.10 per mile. What is the least number of miles she would have to drive per year to make leasing no more expensive than purchasing?

Solution

Let x be no. of miles

She can lease a car for $480 per month? (on an annual? basis). Under this? plan, the cost per mile is ?$0.08.

y = 480*12 + 0.08x = 5760 + 0.08x

If she were to purchase the? car, the fixed annual expense would be ?$4500 and other costs would amount to ?$0.10 per mile

y = 4500 + 0.1x

least number of miles she would have to drive per year to make leasing no more expensive than? purchasing:

5760 + 0.08x < 4500 + 0.1x

1260 < 0.92x

x > 1369.56 miles

She should drive at least 1369.56 miles for leasing no more expensive that purchasing