In a certain city, a landlord used to pay one-eighth (12.5%) of profit he made on his rents. Then tax was increased and he now pays 20% of what he makes as profit from his rents. By what percentage (%) must his rent increase to continue to have the SAME RENT as before tax increase? Answer is 9.375% Procedure are needed to get 9.375% as answer.
In a certain city, a landlord used to pay one-eighth (12.5%) of profit he made on his rents. Then tax was increased and he now pays 20% of what he makes as profit from his rents. By what percentage (%) must his rent increase to continue to have the SAME RENT as before tax increase? Answer is 9.375% Procedure are needed to get 9.375% as answer.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
100%
Course: Financial Mathematics
In a certain city, a landlord used to pay one-eighth (12.5%) of profit he made on his rents. Then tax was increased and he now pays 20% of what he makes as profit from his rents. By what percentage (%) must his rent increase to continue to have the SAME RENT as before tax increase? Answer is 9.375%
Procedure are needed to get 9.375% as answer.
Expert Solution
Step 1
A person or a business entity has to pay taxes on one’s earnings and profits.
This is the mandate of tax law and here the case is that of a landlord paying taxes on his rental earnings.
Step by step
Solved in 3 steps
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