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In 1988, the 240 with the AW70 shipped with a 3.73 rear. Models equipped with the M47 five speed were equipped with a 3.31.
Why? Look at the low gear ratios in the two trannys. The AW70 had a 2.45 first gear, while the M47 geared in at 4.03. The automatic needed the lower geared rear to accomodate the higher geared first to give some oomph off the line, while the lower first gear in the stickshift mated well with the higher rear end ratio.
However, at cruise, the 3.73 need some gearing up, so the AW70 came with a .69 OD/fourth gear, while the M47 OD/fifth gear was .82.
The result was that both cars came off the line reasonably well, and both could cruise at 65 MPH and about 2200 RPM, producing about the same economy on the highway.
Your 3.73 rear mated with an M47 will turn the engine a couple of hundred RPMs higher at cruise, and with that comes reduced efficiency and lower MPG. The speedo will also read about 10% higher than you are actually going - a reading of 75 when you are traveling at 68. Which will also add 10% to the odometer readings. If you plan on checking fuel mileage, be sure to adjust for that error.
Here's a link to the 88 240 owners manual - it lists the trans/rear specs.
http://new.volvocars.com/ownersdocs/1988/1988_240/88240_04.htm#pg99
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