Here's part of the problem. Pure (100%) ethanol only has 67% of the energy that 100% gasoline has, so we'd only get 67% of the mileage--so it should cost only 67% of what gasoline costs.
To calculate how much energy is lost (compared to 100% gas), so we know how much lower our mileage will be, and how much cheaper than pure gas it should be:
1. Multiply 33 times the per cent of ethanol (i.e., E10 = 10% ethanol). Example: 33 x 10% = 3.3% loss of energy;
2. To find how much cheaper the E10 should be than E0 (0% ethanol = pure gas): multiply the 3.3% by the cost per gallon (say, $4.00), 4.00 x 3.3 = E10 should be 13.2 cents per gallon less than E0.
E85, then, should cost 33 x 85% = 28.05% less than E0 ( & 28% lower mileage), so $4/gal x 28.05% = $1.12 less than E0.
From 49445CVO's post above: since E50 has 33 x 50% less energy (= 16.5% less), it will get at least 16.5% less mileage, and should cost $.66 less per gallon ($4/gal x 16.5% = $.66). See my post below for why things aren't even that good!