Question

Four years ago, Sam purchased a vacant lot for $10,000. He just sold it for $13,000. During the time Sam owned the property he paid $350 per year in taxes, $150 per year on maintenance like grass cutting and $90 per year on miscellaneous expenses. How much did Sam gain or lose on the sale?

Answer 1

To calculate the gain or loss on the sale of the vacant lot, subtract the total expenses from the selling price. Sam gained $10,640 on the sale.

Step-by-step explanation:

To calculate the gain or loss on the sale of the vacant lot, we need to subtract the total expenses from the selling price. Sam paid $350 per year in taxes, $150 per year on maintenance, and $90 per year on miscellaneous expenses. So the total expenses over the four years would be:

$350/year * 4 years = $1400

$150/year * 4 years = $600

$90/year * 4 years = $360

The total expenses would be: $1400 + $600 + $360 = $2360

Now we can calculate gain or loss:

Selling Price - Total Expenses = Gain/Loss

$13,000 - $2360 = $10,640

So Sam gained $10,640 on the sale of the vacant lot.