Analyze the situation and explain how you would make a decision.You need a rental car for four days. The daily rate is $20 per day plus 20¢ per mile. The weekly rate is $100, and mileage is included. Which is the better option?

Question

What will be an ideal response?

Answer 1

Answers may vary. One possibility: The answer depends on how many miles you drive the car. If you know you will drive less than 100 miles, then the daily rate is a better option, since  If you know you will drive more than 100 miles, then the weekly rate is a better option. If you aren't sure, then the weekly rate is probably preferable since the risk is limited. Even if you drove the minimum (zero miles), you would only spend $20 more by choosing the weekly rate. But for every 100 miles after the first 100, you would save $20 with the weekly rate. If you drive 500 miles, that's $80 in savings. You should also consider a hidden factor. If you might end up only needing the car 1-3 days, then the daily rate will tend to be a better option. However, if you might end up needing the car for 5-7 days, then the weekly rate is a better option since those days will not cost you extra.