Analyzing rising gas prices


George and Martha were discussing the impact of rising gasoline prices on their budget. Martha suggested that with $5.00 per gallon gas prices on the horizon she should trade in her existing 30 MPG vehicle on a 40 MPG hybrid. Jokingly, George spouted off that they would be better off if he traded in his 10 MPG monster truck on the 12 MPG hot rod he’d been wanting.

They each drive about 10,000 miles per year. All other things being equal (costs of vehicles, etc.), what would you guess? At $5.00 per gallon, how much more money per year would Martha save on gas by trading for a hybrid than George would by trading for his hot rod?

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1 Response to Analyzing rising gas prices

  1. Jeffrey Park Jones says:

    With all of 2 minutes analysis, I figure that 2,916.67 bucks will be saved with the 40 mph vehicle. But George would probably have more fun. However, there’s no cost estimate for electricity so the $2900 buck would be less. It seems to me that since electricity is generated via coal based plants, the term electric car ought to be “coal” car. I’m not sure these electric cars are saving much in the long run, at least with today’s technology.

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