Question

Tina made a down payment of $1,200 for her car lease. Her monthly payment amount is $200 for 36 months. What is the total cost of the lease, if the residual value is $8,500?

A. $14,500
B. $15,700
C. $16,900

Answer 1

The right answer is $16,900

Answer 2

First of all, you need to know the equation to calculate the total cost, and here it is:

total cost = down payment + monthly installments + residual amount
total cost = 1200 + (200*36) + 8500
total cost = 1200 + 7200 + 8500
total cost = 16900

The correct answer is $16,900.