Question

A business executive leases a car for $300/month. She decides to lease another brand for $250/month, but has to pay a penalty of $1000 for breaking the first lease. How long must she keep the second car in order to come out ahead?

a. more than 10 months
b. more than 15 months
c. more than 20 months
d. more than 25 months
Please select the best answer from the choices provided

Answer 1

$1000/$50=20 So the executive would have to keep the second car for more than 20 months to come out ahead.

The answer is C

Answer 2

Option C

Explanation:

A business executive leases a car for $300 per month.

She decides to lease another brand for $250 per month but has to pay a penalty of $1000 for breaking the first lease.

Let she leases these brands for x months.

For brand one,

Total lease to be paid = 300x

For brand two lease amount = 250x + 1000

If both the amounts be the same then

300x = 250x + 1000

300x - 250x = 1000

50x = 1000

x =
`(1000)/(50)=20`

Therefore, If she keeps the second car more than 20 months, second car will come out ahead.

Option C. is the answer.