Answer:
31 months
Step-by-step explanation:
In this, question, we have someone who has an interest in leasing a convertible for a price. We are now asked to calculate the number of months the lease will last given some information about her payment.
Now, let’s calculate this together!
Firstly let’s identify all the payments she will be making. The title and license fee will cost her $1,600, a monthly lease payment of $700, an allowance of 12,000 miles per year at a cost of 12 cents per mile.
Now, let’s cost all the payment she is to make. There is a particular twist to the plot, we do not know the number of months she is leading for, which we are to calculate. Hence, let us represent the number of months here by m. Now, let’s proceed with the total cost to be incurred. Let’s not forget that we have an overage charge of 12,000 miles per year which is same as 1,000 miles allowance per month
Total cost to be incurred = cost of license + cost of monthly lease payment + cost of distance; 1600 + 700(m) + 1000(0.12)(m)
1600 + 700m + 120m = 820m + 1600
Now we are told that the total agreement costs $26,800
This means that 820m + 1600= 26,800
820m = 25,200
m = 25,200/820 = 30.73 approximately 31 months
