## You are going to determine whether buying or renting a 500 gallon propane tank is going to be cheaper in the long run.

- You don't have to pay an annual tank rental fee
- All you have to pay for is the propane when it needs to be refilled

- You don't have to buy the propane tank (average cost $1200 to $1800+)

Use the formula below to determine the

d = the day of your birth.

For example, if you were born on March 16, 'd' would be 16.

Tank cost = $1,200 + (d * 20)

**cost of****purchasing**your propane tank.d = the day of your birth.

For example, if you were born on March 16, 'd' would be 16.

Tank cost = $1,200 + (d * 20)

Use the formula below to determine the

d = the day of your birth. For a person born on the 16th, 'd' would be 16.

Tank rental cost = 60+(4*d) = $124

**annual cost of renting**a propane tank.d = the day of your birth. For a person born on the 16th, 'd' would be 16.

Tank rental cost = 60+(4*d) = $124

The tank rental company sells propane for $2.76/gallon.

You must use their propane in your rental tank. You cannot fill your rental tank with propane from another company. They will not allow it.

You must use their propane in your rental tank. You cannot fill your rental tank with propane from another company. They will not allow it.

## We need to analyze our calculations and determine what we should do (rent or buy)

The following example of how to do this is for someone who was born on the 32nd of the month. Obviously, this is not reality because no months have 32 days.

Data we have calculated that is important for this project:

If you buy your own propane tank

The formula to calculate the purchase price is $1,200 + d*20. So, if d = 32, the formula is $1,200 + 20*32 = $1,200 + $640 =

**$1,840**

Then, the cost to buy 1,250 gallons of propane is 1,250 * $2.47 =

**$3087.50**

If you rent your propane tank

The formula to calculate the monthly rental cost is $60 + d*4. So, if d = 32, the formula is $60 + 32*4 = $60 + $128 =

**$188.**

Then, the cost to buy 1,250 gallons of propane is 1,250 * $2.76 =

**$3,450**

The total annual cost would be $188 (rental) + $3,450 (propane) =

**$3,638**

*So, it seems like owning your own tank is cheaper, but you had to pay*

**$1,840**to buy the tank.