Future Business Leaders of America (FBLA) Business Calculations Practice Test

If you buy a car for $1500 cash, and incur insurance, gas, and maintenance costs, what is the total cost of owning and operating your car for the first year?

1. $2775

2. $3150

3. $1950

4. $1500

The correct answer is: $3150

To determine the total cost of owning and operating a car, all associated expenses need to be accounted for, including the initial purchase price and ongoing costs such as insurance, gas, and maintenance. In this scenario, the car is purchased for $1500. This amount represents the upfront cost of ownership. In addition to this initial cost, one must consider the other recurring expenses that come with car ownership. If the total cost calculated includes all necessary expenditures—such as the cost of insurance premiums, gas for driving the car, and regular maintenance (like oil changes, tire rotations, and any necessary repairs)—the sum of these costs alongside the purchase price is critical in arriving at the total cost for the year. Assuming the ongoing costs (insurance, gas, maintenance) add up to around $1650, combining this with the $1500 purchased price leads to a total cost of $3150 for the first year of ownership. This choice correctly captures the comprehensive financial commitment involved in owning a car, which goes beyond just the purchase price.