Caroline is choosing between two cars which she intends to drive for 10 years. Specification | Model

Question

Caroline is choosing between two cars which she intends to drive for 10 years.

Specification	Model A	Model B
Engine capacity (cc)	$1598$	$1798$
Power rating (kW)	$96$	$72$
Fuel type	Petrol	Petrol-Electric
Fuel consumption $\left(\text{km/L}\right)$	$15.6$	$27$
Cost	$\$180\,888$	$\$189\,300$
Annual maintenance fee	$\$463$	$\$389$
Car-loan simple interest per annum	$1.88\%$	$2.18\%$

Annual road tax for petrol cars is calculated from engine capacity (EC).

Annual road tax for electric cars is calculated from power rating (PR).

For petrol-electric cars, calculate the tax using both engine capacity and power rating; the higher amount is payable.

Calculate the annual road tax for Model A.[1]
Show that the annual road tax for Model B is $975.15, correct to 2 decimal places.[2]
Caroline expects to travel 20 000 km per year and petrol costs $2.57 per litre. Her credit card gives 21% off petrol. She will pay a $60 000 cash downpayment and take a 7-year car loan. Assuming comparable performance over 10 years, determine which model offers better value and justify your answer with clear working.[7]

Accepted Answer

(a) $\$741.73$ (b) $\$975.15$ (c) Model A

Specification	Model A	Model B
Engine capacity (cc)	\(1598\)	\(1798\)
Power rating (kW)	\(96\)	\(72\)
Fuel type	Petrol	Petrol-Electric
Fuel consumption \(\left(\text{km/L}\right)\)	\(15.6\)	\(27\)
Cost	\(\$180\,888\)	\(\$189\,300\)
Annual maintenance fee	\(\$463\)	\(\$389\)
Car-loan simple interest per annum	\(1.88\%\)	\(2.18\%\)

2025 MGS(S) PRELIMS P2 Q10