Question

A business tenant pays 2% of his total gross sales volume as rent, with a minimum base rental of $1,000 per month. In the past year, his sales totaled $435,000. How much rent did he pay?

Answer 1

$12,000

Step-by-step explanation:

Calculation for the amount of rent he paid.

First step is to calculate his sales amount for the year using this formula

Sales = Percentage of total gross sales volume× Sales amount

Let plug in the formula

Sales =2%×$435,000

Sales=$8,700

Second step is to calculate his minimum base rental using this formula

Minimum base rental = Numbers of month × Monthly payment

Let plug in the formula

Minimum base rental= 12 months ×$1,000 per month

Minimum base rental=$12,000

Based on the calculation his minimum annual base rent will be $12,000 which is higher than tha amount of $8,700 which means that the tenants paid the amount of $12,000.

Therefore the amount he paid for his rent will be $12,000.