What should john do

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John's 8-year-old Chevrolet Trail Blazer requires repairs estimated at $6,000 to make it roadworthy again. His wife, Sherry, suggested that he should buy a 5-year-old used Jeep Grand Cherokee instead for $6,000 cash.

Sherry estimated the following costs for the two cars:

                                        Trail Blazer              Grand Cherokee

Acquisition cost           $25,000                    $6,000
Repairs $ 6,000
Annual operating costs
(Gas, maintenance, insurance) $ 2,280             $2,100

Problem 1: What should John do? What are his savings in the first year?

Reference no: EM132715673

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