Question

Henry is at the end of a three-year lease for his car. His leasing company says that his car is currently worth $12,780, a 72% residual value. Determine the original MSRP of Henry’s leased car.

a.$9,201.60
b.$5,633.80
c.$17,750.00
d.$45,642.86

Answer 1

Currently the car is worth $12,780. This is 72% of the original price. Therefore, we get the following:

72 % = $12,780
1 % = 12,780 / 72
100% = 12780 / 72 * 100 = $17,750

Hence, your answer is C. $17,750

Answer 2

Option C is correct.

Explanation:

Given: Residual value is 72% of the original MSRP of Henry’s leased car

To find: Original MSRP of Henry's Leased Car.

let, the original MSRP of Henry’s leased car is x

So, we know that

Residual value = 72% of x

Current worth of Henry's car = $12780

According to the Question,

Residual Value = Current worth of the car

72% of x = 12780

`(72)/(100)* x=12780`

`x=12780*(100)/(72)`

x = 17550

Hence, Original MSRP of Henry's leased car is $17750

Therefore, Option C is correct.