Question

A building is leased for three years at $500 per month and six months' rent is paid in advance. What is the total amount paid in advance?

1) $3000
2) $2500
3) $2000
4) $1500

Answer 1

The total amount paid in advance for a 3-year lease with a monthly rent of $500 and six months' rent paid in advance is $36,000.

Step-by-step explanation:

To calculate the total amount paid in advance for a three-year lease at $500 per month with six months' rent paid in advance, we first find the total cost of the lease for three years. Since there are 12 months in a year, the total cost of the lease for one year is $500/month x 12 months = $6000. Therefore, the total cost of the lease for three years is $6000 x 3 = $18000. Since six months' rent is paid in advance, the total amount paid in advance would be $6000 x 6 = $<<6000*6=36000>>36000.