## Thursday, 13 October 2016

### Prepare a worksheet for the following problem:

You are looking to buy a car. You are considering two options: to buy a second hand car and keep it for ten years or to buy a new car and keep it for four years. The depreciation per year is simply the difference between the purchase price and the resale price divided by the numbers of years. The total running cost per year is the sum of service/repair cost, the fuel cost per year (miles per year multiplied by fuel cost per mile) , the tax and the insurance. The total cost per year is the sum of the depreciation and the running costs. You are supposed to calculate average depreciation per year, fuel cost per year, total running cost per year and total cost per year for both the options. Type in labels: car purchase option, initial cost, resale, years ,average depreciation per year, running cost, services/repairs per year, miles per year, fuel cost per mile, fuel cost per year, tax, insurance, total running cost and total cost per year. Prepare the worksheet having all the details as given below:

 Car Purchase option Option1 Opton2 Initial cost \$          10,000 \$        17,000 Resale \$            1,000 \$        12,000 Years \$                  10 \$                  4 Average depreciation per year Running Cost Services/Repiar per year \$                350 \$              250 Miles Per year \$            5,000 \$          5,000 Fuel cost per mile \$               0.20 \$            0.17 Fuel cost per year Tax \$                450 \$              450 Insurance \$                800 \$              800 Total Running Cost Total Cost Per year