A Foreign Exchange Student Bought a Used Car for $10,000

question 206

Multiple Choice

A foreign exchange student bought a used car for $10,000 and resold it one year later for $6,500. Insurance, license, and operating costs for the year were $1,500. What was his economic cost of owning and operating the car for the year if the market rate of interest was 10 percent?

• A) $3,500
• B) $5,000
• C) $6,000
• D) $8,500

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Definitions:

Glaciers

Large masses of ice that form on land from the accumulation and compaction of snow, moving slowly over time.

Seasonal Effects

The variations in natural or social phenomena that occur at specific times of the year due to Earth's changing position relative to the sun.

Isotopes

Variants of a particular chemical element that have the same number of protons but different numbers of neutrons.

Evaporation

The process by which water changes from a liquid to a gas or vapor, a key part of the Earth's water cycle and energy balance.