[Vision2020] The Price of Gas
Jeff Harkins
jeffh at moscow.com
Mon Apr 11 20:31:04 PDT 2005
I was thinking about the price of gas today (I had to fill up my gas cans
for yard duty) and the sticker shock really hit - for a moment. Hey, it
was $12.50 to fill up a 5 gallon can.
Having been raised in Dallas, I recall that gas was selling for as low as
.179 per gallon in the early 60's. In 1964, I recall the price was about $
.199 per gallon. Just for fun, let's calculate the price today, if the
average inflation rate was about 6.5% per year. I was surprised - if you
invested $ .199 in a savings account in 1965 and held it there for 40 years
(2005) - compounded at 6.5% annually, the amount you could withdraw would
equal approximately $2.48. Interesting huh? Guess we have been getting a
pretty good deal for the past 40 years.
S0 just how much will the gas price increase affect a person. Assume that
you drive about 12,000 miles a year. Also assume that you drive a vehicle
that gets about 15 miles per gallon. This means that you will use about 800
gallons of gas. The price is up about $1 since the first of the year. If
it remains at about $2.50 per gallon, it will cost you about $800 more per
year. Under these assumptions, you will spend about $2,000 for gas for the
next 12 months. Hmmm - food for thought.
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