The Commuter's Choice
A commuter has two options for getting to work: driving or taking the train. Driving costs $0.60 per mile for gas and wear, plus a flat $12 daily parking fee. The train costs $3.50 per ride, and the commuter needs to take the train twice a day (round trip). The commuter's workplace is 18 miles from home. Additionally, the commuter values their time at $15 per hour. Driving takes 40 minutes each way in heavy traffic, while the train takes 30 minutes each way, but the commuter must also wait 10 minutes for the train each way. The commuter works 20 days per month.
1. Calculate the monthly cost of driving and the monthly cost of taking the train, including both out-of-pocket expenses and the value of time spent commuting. Which option is cheaper per month?
Read the worked answer
Driving: Out-of-pocket: gas/wear = 2 * 18 miles * $0.60 = $21.60 per day; parking = $12 per day; total out-of-pocket = $33.60 per day. Time: 2 * 40 min = 80 min = 1.333... hours per day; value = 1.333... * $15 = $20 per day. Total daily cost = $33.60 + $20 = $53.60. Monthly (20 days) = $1072.
Train: Out-of-pocket: 2 rides * $3.50 = $7 per day. Time: travel time = 2 * 30 min = 60 min; waiting time = 2 * 10 min = 20 min; total time = 80 min = 1.333... hours; value = $20 per day. Total daily cost = $7 + $20 = $27. Monthly = $540.
Train is cheaper by $1072 - $540 = $532 per month.
2. Suppose the commuter could work remotely one day per week, reducing commuting days to 16 per month. Recalculate the monthly costs for both options and determine the new savings from taking the train.
Read the worked answer
With 16 days: Driving monthly cost = 16 * $53.60 = $857.60. Train monthly cost = 16 * $27 = $432. Savings = $857.60 - $432 = $425.60.