Determine the following estimate without using a calculator. Then use a calculator to perform the computation necessary to obtain an exact answer. How reasonable is your estimate when compared to the actual​ answer?

You lease a car at ​$304

per month for 3

years. Estimate the total cost of the lease by rounding the monthly payment to the nearest hundred.

1 answer

Rounding $304 to the nearest hundred gives $300.

To estimate the total cost, we can multiply the monthly payment by the number of months in 3 years:

$300/month x 36 months = $10,800

Using a calculator, the exact total cost of the lease is:

$304/month x 36 months = $10,944

Our estimate was off by $144, which is less than 2% of the actual cost. Therefore, our estimate was reasonable.