Answered

2 Financial Options Table
\begin{tabular}{|c|c|c|c|}
\hline
& \begin{tabular}{l}
Monthly \\
payment
\end{tabular} & \begin{tabular}{l}
Up-front \\
cost
\end{tabular} & \begin{tabular}{l}
Insurance \\
and gas
\end{tabular} \\
\hline
\begin{tabular}{l}
Option A \\
Buy new
\end{tabular} & \begin{tabular}{l}
\[tex]$338 for \\
60 months
\end{tabular} & \$[/tex]2,500 & \begin{tabular}{l}
\[tex]$275 a \\
month
\end{tabular} \\
\hline
\begin{tabular}{l}
Option B \\
Lease new
\end{tabular} & \begin{tabular}{l}
\$[/tex]229 for \\
36 months
\end{tabular} & \[tex]$3,925 & \begin{tabular}{l}
\$[/tex]275 a \\
month
\end{tabular} \\
\hline
\begin{tabular}{l}
Option C \\
Buy used
\end{tabular} & \begin{tabular}{l}
\[tex]$250 for \\
36 months
\end{tabular} & \$[/tex]2,000 & \begin{tabular}{l}
\$225 a \\
month
\end{tabular} \\
\hline
\end{tabular}

Based on your budget, which transportation option is the best financial decision for you? Explain your answer in at least two sentences.



Answer :

To determine which transportation option is the best financial decision, we need to calculate the total cost for each option over the given periods, including the monthly payments, up-front costs, and insurance and gas expenses.

1. Option A (Buy new):
- Monthly payment: [tex]$338 for 60 months - Up-front cost: $[/tex]2,500
- Insurance and gas: [tex]$275 per month for 60 months - Total cost: $[/tex](338 \times 60) + 2,500 + (275 \times 60) = \[tex]$39,280$[/tex]

2. Option B (Lease new):
- Monthly payment: [tex]$229 for 36 months - Up-front cost: $[/tex]3,925
- Insurance and gas: [tex]$275 per month for 36 months - Total cost: $[/tex](229 \times 36) + 3,925 + (275 \times 36) = \[tex]$22,069$[/tex]

3. Option C (Buy used):
- Monthly payment: [tex]$250 for 36 months - Up-front cost: $[/tex]2,000
- Insurance and gas: [tex]$225 per month for 36 months - Total cost: $[/tex](250 \times 36) + 2,000 + (225 \times 36) = \[tex]$19,100$[/tex]

Based on the total cost calculations, Option C (buying used) is the best financial decision with a total cost of \[tex]$19,100, which is significantly lower than the costs of Option A (\$[/tex]39,280) and Option B (\$22,069). This makes Option C the most economical choice for your budget.