Toyota: transmission, toyota camry, gas mileage

Question
hello sir

i purchased toyota camry 92(119K)(automatic) 4 months ago ,  it is making lot of noise when you press the accelerator & when you shift the gear mode from "P" to "R" the RPM goes down to 1 from 2 and when you change it to "D" it again goes up to 2 from 1.

from 0-40mph the RPM reaches upto 3 and more. and further it suddenly drops from 3 to 2. till then the engine struggles for pick up but once it drops to 2 RPM it goes smoothly, it does happen usually on free way.

due to this there is no pickup in the engine and it is giving very bad gas mileage. ( recently i have changed its air filter)

please help me sir, i am very much confused.
Thank you

Answer
Well, there are a couple of issues.  First of all, it sounds like the transmission is about ready to die.  Check the condition of the fluid, if it's black, brown, or really murky light red and it smells burned or you can even see little bits of stuff in the fluid, then your tranmission is on it's last leg.

As far as it being at 1K idle, that's not normal either.  You should be at about 800 rpm, 1K is too high.  That sounds like the engine may have an issue though but I don't want to start guessing what it could be.  

Hopefully this helps!
-David D.

P.S. Have you gotten any "check engine" lights?