OxBowBusiness

Petrol Prices III

Barney wrote from Guernsey following yesterday's petrol price entry and I responded with another excellent idea!

Barney first:

Dear Duncan

Thank you for the useful site on petrol prices I will be finding a use in my lessons. However living in Guernsey I would just like to say that petrol is 49p per litre!!! As that is right 49p per litre …………………… honestly I am not rubbing it in ;-)

Barney Clarke
Guernsey

Then my reply:

Surely not Barney!

How about turning that into a break even type exercise for your students then?

So, sad Mr W lives in England and he wants to take his car by ferry to Guernsey to fill up on petrol to take advantage of the price differential between the two places (NB, this introduces them to the concept of arbitrage by way of a bonus bit of jargon!).

a) How much petrol would he have to buy to save exactly his ferry fare of £225 and the £60 it will cost in petrol he will buy in England before he sets off to enable him to drive there and back if the price of petrol in England is:

90.9 per litre
97.9 per litre
b) How much petrol should Mr W buy now if he wanted to save, say,

£50 on the trip
£100 on the trip
Assume the same petrol prices you used in part a) of the question and that sad Mr W will take with him enough storage capacity to buy whatever petrol is needed to achieve his objectives.


Duncan

posted by Duncan Williamson @ 11:12 AM