Ethanol blended with gasoline can be used to power a​ "flex-fueled" car. One particular blend that is gaining in popularity is​ E85, which is​ 85% ethanol and​ 15% gasoline. E85 is​ 80% cleaner burning than gasoline​ alone, and it reduces our dependency on foreign oil. But a​ flex-fueled car costs ​$ more than a conventional​ gasoline-fueled car.​ Additionally, E85 fuel gets ​% less miles per gallon than a conventional automobile. Consider a​ 100% gasoline-fueled car that averages miles per gallon. The​ E85-fueled car will average about miles per gallon. If either car will be driven miles before being traded​ in, how much will the E85 fuel have to cost​ (per gallon) to make the​ flex-fueled car as economically attractive as a conventional​ gasoline-fueled car? Gasoline costs ​$ per gallon. Work this problem without considering the time value of money.

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Ethanol blended with gasoline can be used to power a flex-fueled car. One particular blend that is gaining in popularity is E85 , which is 85% ethanol and 15% gasoline. E85 is 80% cleaner burning than gasoline alone, and it reduces our dependency on foreign oil. But a flex-fueled car costs $1,000 more than a conventional gasoline-fueled car. Additionally, E85 fuel gets 10% less miles per gallon than a conventional automobile. Consider a 100% gasoline -fueled car that averages 30 miles per gallon. The E85-fueled car will average about 27 miles per gallon. If either car will be driven 81000 miles before being traded in, how much will the E85 fuel have to cost (per gallon) to make the flex-fueled car as economically attractive as a conventional gasoline-fueled car? Gasoline costs $3.89 per gallon. Work this problem without considering the time value of money

answer :

$3.17

Explanation:

Determine how much E85 fuel have to cost

Fuel needed by 100% gasoline fueled car

= 81,000 miles / 30 = 2700 gallons

Fueled needed by E85 car

= 81,000 miles / 27 = 3000 gallons

next step : use the relation below

[ (Additional cost of flex fuel car) + (flex fuel consumption * cost of flex fuel per gallon( x ) )  ]   = [ Gasoline consumption * cost of gasoline per gallon ]

= 1000 + 3000x = 2700 * 3.89

= 1000 + 3000x = 10503

∴ x = 9503 / 3000 = $3.17 per gallon