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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.

Verified Answer :

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The residual value or some may term it the salvage value is the value of an item after a certain period of time. Let x be the original msrp (manufacturer suggested retail price), we can calculate for the salvage value as follows:
                                               12,780 = 0.72x
The value of x from the equation generated above is 17,750. Therefore, the original msrp is equal to $17,750.

Answer:

Original MSRP of  Henry's leased car = $17750

Step-by-step explanation:

Let's assume the original msrp of Henry’s leased car is x

Given : residual value is 72% of the original MSRP of Henry’s leased car

⇒ Residual value = 72% of x

Current worth of Henry's car = $12780

⇒ Residual Value = Current worth of the car

⇒ 72% of x = 12780

\(\implies \frac{72}{100}\times x=12780\\\\\implies 72\times x=12780\times 100\\\\\implies x = \frac{12780\times 100}{72}\\\\\implies x = 17750\)

Hence, Original MSRP of  Henry's leased car = $17750

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