87. A tenant's annual expenses included the following: $24,000 for base rent, $8,400 for taxes, insurance, and common area maintenance (triple net). The property manager receives a fee of 3% of gross annual rent. How much will the property manager receive?
Answer: A
The property manager will receive $720.
To calculate the property manager's fee, we first determine the gross annual rent, which is $24,000. The property manager's fee is then calculated as 3% of this amount, resulting in a payment of $720.
A) $720
This option is correct as it directly reflects the calculation of 3% of the gross annual rent of $24,000. By multiplying $24,000 by 0.03, we arrive at $720, which is the amount the property manager will receive.
B) $1,000
This option is incorrect because $1,000 does not represent 3% of the gross annual rent. If we were to calculate it, 3% of $24,000 is $720, making $1,000 an overstated figure for the property manager's fee.
C) $1,080
Option C is also incorrect as it miscalculates the property manager's fee. To arrive at $1,080, one would have to erroneously assume a higher percentage than 3%, which does not align with the given fee structure.
D) $1,332
This option is incorrect because $1,332 significantly exceeds 3% of the gross annual rent. It suggests an inflated fee calculation, which does not correspond to the specified fee structure based on the annual rent amount.
Conclusion
The correct answer, $720, accurately reflects the 3% fee of the gross annual rent of $24,000. All other options fail to correctly calculate the percentage fee, either by overstating the amount or by misapplying the percentage formula. Thus, $720 is definitively the right figure for the property manager's compensation.