Question

As a property manager, you have an agreement that your fee will be 8% on the first $150,000 gross rent, 5% on the next $100,000, and 2.5% on everything over the $250,000. If last year’s gross rent was $417,500 what was the management fee?

Answer 1

$21,187.50

Step-by-step explanation:

The computation of the management fee is shown below:

= First gross rent × given percentage + next given amount × given percentage + difference amount × given percentage

= $150,000 × 8% + $100,000 × 5% + $167,500 × 2.5%

= $12,000 + $5,000 + $4,187.50

= $21,187.50

The difference amount is

= $417,500 - $250,000

= $167,500