1. 7-1 BUYING A NEW CAR OBJECTIVES: 1) CLASSIFY COSTS OF OWNERSHIP AND COSTS OF OPERATION FOR A CAR 2) CALCULATE EXPENSE PER MILE FOR A CAR 3) CALCULATE MARKUP ON A NEW CAR Warm Up Calculate (round to two decimal places) 1.120 / 250 2.12,000 (0.647) 3.90% of 34,510 4.17,995 / 15,850

2. 7-1 BUYING A NEW CAR OBJECTIVES: 1) CLASSIFY COSTS OF OWNERSHIP AND COSTS OF OPERATION FOR A CAR 2) CALCULATE EXPENSE PER MILE FOR A CAR 3) CALCULATE MARKUP ON A NEW CAR Vocabulary Costs of Ownership – the costs associated with owning a car with only the potential to drive it legally Costs of Operation – the costs associated with actually driving the vehicle Options – extra items not included with the base model that increase the base price of the automobile Sticker Price – total price of all of the options and the base price Markup – the difference in sticker price and invoice price (amount the dealer paid)

3. 7-1 BUYING A NEW CAR OBJECTIVES: 1) CLASSIFY COSTS OF OWNERSHIP AND COSTS OF OPERATION FOR A CAR 2) CALCULATE EXPENSE PER MILE FOR A CAR 3) CALCULATE MARKUP ON A NEW CAR Example 1 – p 244 Calculate the cost per mile Looking back at the chart on p 243, you can see that he can afford a compact car ($0.378), and with slightly more spent per week, he could afford a midsize car ($0.453). Cost - $90 Mileage – 200 miles Cost per mile90 / 200 = $0.45 per mile

4. 7-1 BUYING A NEW CAR OBJECTIVES: 1) CLASSIFY COSTS OF OWNERSHIP AND COSTS OF OPERATION FOR A CAR 2) CALCULATE EXPENSE PER MILE FOR A CAR 3) CALCULATE MARKUP ON A NEW CAR Example 2 – p 244 Calculate the cost per year by multiplying mileage per year by cost per mile To find cost per week, divide cost per year by 52 Mileage per year – 15,000 milesFrom the cost per mile chart on p 243: compact car - $0.378 Cost per year15,000 * $0.378 = $5670 per year Cost per week5670 / 52 = $109.04 per week

5. 7-1 BUYING A NEW CAR OBJECTIVES: 1) CLASSIFY COSTS OF OWNERSHIP AND COSTS OF OPERATION FOR A CAR 2) CALCULATE EXPENSE PER MILE FOR A CAR 3) CALCULATE MARKUP ON A NEW CAR Example 3 – p 244 If you are getting a 10% discount, then you are paying 90% of the sticker price..05 * $23,103.90 = $1155.20.90 * $25,671 = $23,103.90 You pay sales tax as a percentage of the amount paid Total Cost:$23,103.90 + $1155.20 = $24,259.10

6. 7-1 BUYING A NEW CAR OBJECTIVES: 1) CLASSIFY COSTS OF OWNERSHIP AND COSTS OF OPERATION FOR A CAR 2) CALCULATE EXPENSE PER MILE FOR A CAR 3) CALCULATE MARKUP ON A NEW CAR Example 4 – p 245 Determine the “drive-away” cost by subtracting the trade-in allowance from the offer and then adding the sales tax. The sales tax is calculated on the price before subtracting the trade-in value. $32,987 - $30,999 = $1988 Sales Tax.04 * $30,999 = $1239.96 To find the percent of discount, first find the amount of the discount Percent of discount = $1988 / $32,987 =.06 = 6% $30,999 - $4200 = $26,799$26,799 + $1239.96 = $28,038.96

7. 7-1 BUYING A NEW CAR OBJECTIVES: 1) CLASSIFY COSTS OF OWNERSHIP AND COSTS OF OPERATION FOR A CAR 2) CALCULATE EXPENSE PER MILE FOR A CAR 3) CALCULATE MARKUP ON A NEW CAR Example 5 – p 245 First, find the markup amount by subtracting. $29,155 - $24,500 = $4655 4655 / 24,500 = 0.19 = 19% Then find the % by dividing the markup by the invoice

8. 7-1 BUYING A NEW CAR OBJECTIVES: 1) CLASSIFY COSTS OF OWNERSHIP AND COSTS OF OPERATION FOR A CAR 2) CALCULATE EXPENSE PER MILE FOR A CAR 3) CALCULATE MARKUP ON A NEW CAR Example 6 – p 245 A markup of 17% means that you are paying 117% of the invoice cost. This might be best shown with a proportion 32753 (100) = 3275300 117 / 100 = 32753 / xSolve by cross-multiply & divide 3275300 / 117 = $27,994.02

9. 7-1 BUYING A NEW CAR OBJECTIVES: 1) CLASSIFY COSTS OF OWNERSHIP AND COSTS OF OPERATION FOR A CAR 2) CALCULATE EXPENSE PER MILE FOR A CAR 3) CALCULATE MARKUP ON A NEW CAR Homework p 246-247 #1-9, 16-22