Question

Henry is at the end of a three-year lease for his car. His leasing company says that his car is currently worth $12,780, a 72% residual value. Determine the original MSRP of Henry’s leased car.
a.
$9,201.60
b.
$5,633.80
c.
$17,750.00
d.
$45,642.86

Answer 1

Let the original MSRP be x. Since $12,780 is 72% of the MSRP:
0.72x = 12,780
x = 12,780 / 0.72 = 17,750

Answer: c. $17,750.00