Question

A management agreement between an owner and a broker states that the management fee will be 7?

1) 15,800
2) 16,688
3) 17,575
4) 17,800

Answer 1

The management fee is calculated by multiplying the agreed percentage (7%) with the total amount. So The correct answer is 2) 16,688.

Step-by-step explanation:

The management fee is calculated by multiplying the agreed percentage (7%) with the total amount. In this case, the total amount is not explicitly mentioned, but we can set it up as an equation using the given options. Let \( x \) represent the total amount.

The equation for the management fee
`(\( \text{Fee} \)) is given by:\[ \text{Fee} = (7)/(100) * x \]`

Now, we can substitute the values from the options into the equation to find the correct total amount:

`1) \( \text{Fee} = (7)/(100) * 15,800 = 1,106 \)2) \( \text{Fee} = (7)/(100) * 16,688 = 1,168.16 \)3) \( \text{Fee} = (7)/(100) * 17,575 = 1,228.25 \)4) \( \text{Fee} = (7)/(100) * 17,800 = 1,246 \)`

Comparing the calculated fees with the given options, we see that the closest match is option 2) 16,688, which gives a fee of 1,168.16. Therefore, the correct answer is option 2) 16,688.

In conclusion, the management fee is determined by multiplying the agreed percentage with the total amount, and after evaluating the options, we find that option 2) 16,688 satisfies this condition, making it the correct answer. So The correct answer is 2) 16,688.