Question

Carl is approaching the Canadian border on a trip from Vermont to Montreal, Canada, and the gas in his tank is low. He wants to determine if it would be more cost efficient to buy gas before or after crossing the border. He consults Gas Buddy and finds that the cost of gas in the US is 2.21 USD per gallon, while just across the border it is $1.40 CAD per liter. The currency exchange rate is $0.750 USD per $1.000 CAD. How much more gas (in gallons) will he get for $20 USD if he buys the gas before crossing the border instead of buying it in Canada? (1.000 liter = 0.264 US gallons).

Answer 1

Answer:

4.02 gallons

Explanation:

From the illustration:

$0.750 USD = $1.00 CAD

Therefore,

$20 USD =  20 x 1/0.750 = $26.667 CAD

The cost of gas in the US is 2.21 USD per gallon.

20 USD will be able to get 20/2.21 = 9.05 gallons

The cost of gas across the border is 1.40 CAD per liter.

0.264 gallon = 1 liter

1 gallon = 1/0.264 = 3.788 liters

This means that 1 gallon = 3.788 x 1.40 = 5.303 CAD

Hence, 26.667 CAD will get 26.667/5.303 = 5.03 gallons

If he buys a $20 USD gas before crossing the border, Carl will get 9.05 gallons, but if he buys it after crossing the border, he will get 5.03 gallons. Therefore, if he buys the gas before crossing the border instead of buying it in Canada, he will get 9.05 - 5.03 = 4.02 gallons extra.