Aused-car costs $5,000. you figure you can get 4 years out of it. you drive 10,000 miles per year. your car insurance costs $1,200 per year. you figure you'll spend $400 per year on maintenance. gas costs $4 per gallon, and the car gets 25 miles per gallon. what will your average cost (all costs included) per mile be over the 4 years?

Solutions 

We know a used car is $ 5,000. You can drive 10, 000 miles per year in that car for 4 years. The care insurance per year would be $ 1,200. You know that you will spend $ 400 on maintenance. The gas will cost $ 4 per gallon and the car gets 25 miles per gallon.  

⇒ (car) = $ 5,000 
⇒ (Miles per year) = 10,000 
⇒ ( Insurance per year) = $ 1,200 
⇒ ( Maintenance ) = $ 400
⇒ (Gas) = $ 4 per gallon 

To solve this problem we have to do

Total Cost = Cost Car + 4 × Car Insurance + 4 × Maintenance + 4 × Miles/Year × (cost/gallon) / (miles/gallon) 

We multiply by 4 since he figured out the car will last 4 years. 

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Calculations 

Total Cost = Cost Car + 4 × Car Insurance + 4 × Maintenance + 4 × Miles/Year × (cost/gallon) / (miles/gallon)  

Total Cost = (car) $5,000 + (Car Insurance) 4 × $1200 + (Maintenance) 4 × $400 + (cost/gallon) 4 × 10,000 (miles/gallon)  × $4/25 = $17,800 

Now we have to find per mile 

We know that 10,000 miles = 1 year 
To convert to 4 years multiply by 4 = 40,000 miles

Cost/Mile = $17,800 / (40,000 miles)
= $0.445 / mile
= 44.5 cents per mile.

Answer = 44.5 cents per mile.