1. The problem gives the residual value in percentage, and you need it in dollars. So, if the MSRP for the car Jennifer is leasing is $ 17,500, you have:

57%/100=0.57

residual value=$17,500*0.57= $9,975

2. Then, you need to substract the residual value and the lease term, to calculate the value of the car, as below:

car value=$17,500-$9,975=$7,525

3. You need to calculate the money factor, which is the interest rate divided by 2400. Then, you have:

Interest rate=9%/100=0.09

Money factor=0.09x2400
Money factor=0.00375

4. The interest is:

I=($17,500+$9,975)(0.00375)
I=$103.03

5. Therefore, the monthly payment is:

Monthly payment=(car value/36 months)+Interest
Monthly payment=($7,525/36)+$103.03
Monthly payment=$209.02+$103.03
Monthly payment=$312.06

What will Jennifer’s monthly lease payment be?

The answer is: d. $312.06

6 0

3 years ago

Read 2 more answers