Ethanol blended with gasoline can be used to power a \"flex-fueled\" car. one pa

Question

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 $100,000 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 average 30 miles per gallon. The E85-fueled average about 27nmiles per galloon. If either car will be driven 81,000 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 $2.89 per gallon. Work this problem without considering the time value of money. (2.1)

Explanation / Answer

Miles rating of gasoline car = 30 miles/gallon
Miles rating of E85 car = 27 miles/gallon
Fuel needed for 81000 miles for G-car = 81000/30 = 2700 gallons
Fuel needed for 81000 miles for E85 car = 81000/27 = 3000 gallons
Fuel cost for G-car = 2700*2.89 = 7803 ($)
Fuel cost for E85 car = 3000*x ($)
(where, $ x is the cost of E85 fuel per gallon)
E85 car costs $1000 more than G-car.
Hence, Fuel cost of E85 car and taking additional into account ,
this should match Fuel cost of G-car.
=> 3000x +1000 = 7803
=> x = (7803 - 1000)/3000 = 2.27 ($) (ANSWER)

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