Last year Yolanda paid $25,800 for a light truck and drove it 21,000 miles in the first year. She spent these amounts: $1,120, gas;$578, repairs and maintenance ; $1,277, insurance; $64, truck washes;$1,200, interest on truck loan; other,$156.
12. Using a 20% rate and the declining balance method, what is the depreciation for the first year???
14. What was the cost per mile of owning and operating the truck last year, including depreciation???
12. Using a 20% rate and the declining balance method, what is the depreciation for the first year???
14. What was the cost per mile of owning and operating the truck last year, including depreciation???
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12. 20% depreciation means the truck loses 20% of it's value each year. At the end of the first year of ownership, the truck will have lost .20*25800 = $5160 to depreciation
14. Cost per mile = total cost divided by number of miles:
(1120+570+1277+64+1200+156+5160)/25800 = $0.37 per mile
14. Cost per mile = total cost divided by number of miles:
(1120+570+1277+64+1200+156+5160)/25800 = $0.37 per mile