Question

Eva Truett had an open-end lease for a minivan for her homedecorating business. The lease cost $315 per month for60 months. She paid a deposit of $1,200, a title fee of $135,and a license fee of $85. At the end of the lease, she can buythe van for its residual value of $3,850.a. What is the total lease cost?b. What is the total cost if she buys the van?

Answer 1

Given the word problem, we can deduce the following information:

1. The lease cost $315 per month for 60 months. It means the number of payments is 60 while the amount of payment is $315 per month.

2. Eva Truett paid:

Deposit=$1,200

Title Fee= $135

License Fee = $85

3. Residual Value= $3,850

To determine the total lease cost, we use the formula:

Total Lease Cost = ((Number of Payments)(Amount of Payment))+Deposit+Title

Fee+License Fee

We plug in what we know:

`\begin{gathered} \text{Total Lease Cost = ((}60)(315))+1200+135+85 \\ \text{Calculate} \\ \text{Total Least Cost = 20,320} \end{gathered}`

So, the total lease cost is $20,320.