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A consumer is considering two different purchasing options for the car of their choice. The first option, which is leasing, is described by the equation 250x - y + 4000 = 0 where x represents the number of months of ownership and y represents the total paid for the car after ‘x' months. The second option, which is the financing option, will cost $400 for 0 months of ownership, (0,400), and $4400 for 10 months of ownership, (10, 4400). Part A: Find the equations, in slope/y-intercept form, for each of the purchasing options. Explain the significance of the slope and y-intercept for each purchasing option. Part B: Graph each equation on the same set of axes and compare. Under what conditions is each purchasing option the best choice? Be sure to provide a thorough answer. Use detailed information from your graph to back up your choices.

Answer :

Answer:

  • y=250x+4000
  • y=400x+400

Step-by-step explanation:

Given that:

  • x represents the number of months of ownership; and
  • y represents the total paid for the car after ‘x' months.

First Option (Leasing)

250x - y + 4000 = 0

Expressing the equation in the Slope-Intercept Form y=mx+b, we have:

y=250x+4000

Second Option (Financing)

$400 for 0 months of ownership, (0,400), and $4400 for 10 months of ownership, (10, 4400).

First, we determine the slope of the line joining (0,400) and (10,4400)

[tex]Slope, m= \dfrac{4400-400}{10-0}= \dfrac{4000}{10}=400[/tex]

We have:

y=400x+b

When y=400, x=0

400=400(0)+b

b=400

Therefore, the Slope-Intercept Form of the second option is:

y=400x+400

Significance

  • In the first option, there is a down payment of $4000 and a monthly payment of $250.
  • In the second option, there is a down payment of $400 and a monthly payment of $400.

Part B

We notice from the graph that after 24 months, the cost for leasing and financing becomes the same ($10,000). Therefore, a consumer will be better off financing since the downpayment for leasing is higher.

i.e

  • When x=0, y=$4000 for leasing
  • When x=0, y=$400 for financing
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