Computing in the Business World
Suppose you are opening a 1,000 square foot baseball card store in a shopping center. You have signed a lease that requires you to pay a monthly rent of $1.75 per square foot, plus 5% of your gross annual sales. What is the total amount of rent you will pay in one year if you have sales of $85,000?
First calculate your rent.
Then calculate the tax on your sales (5% of your sales).
Then add these two figures together.
6,000
1,000*1.75= $1,759
0.05*85,000= 4250
4250+1,750=
6,000
Step 1: Calculate the rent amount per month
Rent per square foot = $1.75
Store size = 1,000 square feet
Rent per month = $1.75 * 1,000 = $1,750
Step 2: Calculate the tax on sales
Sales = $85,000
Tax on sales = 5% of sales = 0.05 * $85,000 = $4,250
Step 3: Total rent payment for the year
Rent per year = Rent per month * 12 = $1,750 * 12 = $21,000
Step 4: Add the rent and tax together
Total rent payment for the year = Rent per year + Tax on sales = $21,000 + $4,250 = $25,250
Therefore, the total amount of rent you will pay in one year if you have sales of $85,000 is $25,250.
To calculate the monthly rent, multiply the square footage by the monthly rate per square foot:
Rent (per month) = 1,000 square feet * $1.75/square foot
So, the monthly rent would be $1,750.
Next, calculate the annual rent by multiplying the monthly rent by 12:
Rent (per year) = $1,750/month * 12 months
So, the annual rent would be $21,000.
To calculate the tax on sales, multiply the sales amount by the tax rate:
Sales Tax = 5% * $85,000
So, the sales tax would be $4,250.
Finally, add the annual rent and the sales tax together to get the total amount of rent you will pay in one year:
Total Rent (per year) = Annual Rent + Sales Tax
Total Rent (per year) = $21,000 + $4,250
Therefore, the total amount of rent you will pay in one year, considering the sales of $85,000, would be $25,250.