6 POINT QUESTION

One common type of calculation that is made frequently out there in the real world is a “fixed and variable cost problem” – what I call a Garfield problem because it’s a “lump and per” scenario. You pay a fixed cost (or a lump sum) to rent the car, or have phone service. Then, in addition, you have to pay a variable cost (so much per mile or per minute). People use math all the time (or should!) to decide which company has the best plan for their needs.

For the purposes of this Forum, we are going to discuss a subject near and dear to everyone’s heart these days – the price of operating your vehicle. To do this, we need to collect three types of data – our fixed costs, our variable costs and our usage. If you either don’t own a car just borrow a friend’s data or use a hypothetical example based on internet research. One student even did the analysis on his aircraft carrier!

For your initial post (worth 6 points), in 250 words or more, give a full and complete answer to the following questions. Then reply to 2 classmates on substantive posts of 50 words or more.

A – What are your fixed monthly car expenses? (1 point)

Although most Americans view their car expenses as an inevitable part of life and not part of their actual car calculations, we are going to figure out what our car expenses really are.

I want you to add up all the payments that you must make (car payment, garage rent, license tags, insurance, etc.)–regardless of whether or not old Betsy ever emerges from the garage. If you only pay insurance once a year then divide that number by 12 to add it to your monthly fixed expenses. You don’t have to share the specifics if you would prefer not to–you can just give the total.

B – What are your variable monthly car expenses? (1 point)

Add up your variable expenses—the ones that depend on how many miles you drive the car. Don’t get into the nitty-gritty of your car’s miles per gallon—just give an approximation of what you spend each month on variable expenses (gas, oil, washer fluid, car washes, etc.).

C – What is your total cost per month? (1 point)

D – Approximately how many miles do you drive a month? (1 point)

All of the discussion in the media is about the price of gasoline per gallon, but to calculate your personal cost, a more relevant statistic for you is your cost per mile. That is one of the things that you should consider when you decide whether or not to drive home for lunch.

E – Divide C by D to figure your cost per mile. (1 point)

Pay attention here. If the money is more than the miles, the cost is over \$1.00 per mile – if the miles are more than the money, the cost is under \$1.00 per mile. What is your cost per mile?

Surprised? One student did the calculations wrong and got that she was spending \$316.00 a mile. That would go way beyond surprised!

F – What changes might you make to save money on your total car expenses? (1 point)

Another student lived in a big city and only used the car on weekends. When he finished the calculations, he cut a deal with a local car rental company, sold his car, and wound up renting a very nice car every weekend for less than he was spending on a car of his own!

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