Question

Mike leases a new pickup by paying $3100 up front and $354 a month over three years. The lease also stipulates he will be charged $0.15 per mile for every mileover 36,000. If he puts 41,715 miles on the truck, what will be the total cost of the lease?Round your answer to the nearest cent (hundredth)

Answer 1

$16,701.25

Explanations:

Given the following parameters:

Upfront payment = $3100

If he paid $354 a month over three years, the total amount paid for the 3 years is given as:

Amount paid for 3 years = 354 * 36 = $12,744

If the lease also stipulates he will be charged $0.15 per mile for every mile over 36,000 and 41,715 miles on the truck, the total amount paid for all the miles is;

`\begin{gathered} Amount\text{ paid for miles above 36000}=0.15(41,715-36,000) \\ Amount\text{ paid for miles above 36000}=0.15(5715) \\ Amount\text{ paid for miles above 36000}=\$857.25 \end{gathered}`

Determine the total cost of the lease

Total cost of the lease = $3100 + $12,744 + $857.25

Total cost of the lease = $16,701.25

Hence the total cost of the lease to the nearest cent is $16,701.25