Furniture rental costs 10% of the value of the furniture per month and is subject to 8.25% sales tax. Calculate the total cost to rent the equipment shown in the table for 3 months.
Furniture Rental
| Item | Value, per piece |
| ------------------ | ---------------- |
| Sofa (1) | $2,000 |
| Office Chair (6) | $120 |
| Conference Table (1) | $2,000 |
$[?]
Round to the nearest cent.
Answer (2)
The total cost to rent the furniture for 3 months is $1,532.82. This includes the rental fees and applicable sales tax. The calculations are based on the total value of the furniture and the defined rental rate and tax percentage.
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Calculate the total value of the furniture: $2 , 000 ( so f a ) + $720 ( c hai rs ) + $2 , 000 ( t ab l e ) = $4 , 720 .
Determine the monthly rental cost: $4 , 720 × 0.10 = $472 .
Compute the sales tax: $472 × 0.0825 = $38.94 .
Calculate the total cost for 3 months: ( $472 + $38.94 ) × 3 = $1 , 532.82 .
Explanation
Calculate Total Furniture Value First, we need to calculate the total value of the furniture being rented. We have 1 sofa at $2,000, 6 office chairs at $120 each, and 1 conference table at $2,000.
Total Sofa Value The total value of the sofas is: 1 sofa × $2 , 000/ sofa = $2 , 000
Total Chair Value The total value of the office chairs is: 6 chairs × $120/ chair = $720
Total Table Value The total value of the conference table is: 1 table × $2 , 000/ table = $2 , 000
Total Furniture Value Now, we sum the values of all the furniture to find the total furniture value: $2 , 000 + $720 + $2 , 000 = $4 , 720
Monthly Rental Cost The monthly rental cost is 10% of the total furniture value: $4 , 720 × 0.10 = $472
Sales Tax Calculation The sales tax is 8.25% of the monthly rental cost: $472 × 0.0825 = $38.94
Total Monthly Cost The total monthly cost is the sum of the monthly rental cost and the sales tax: $472 + $38.94 = $510.94
Total Cost for 3 Months Since the rental period is 3 months, the total cost is: $510.94 × 3 = $1 , 532.82
Final Answer Therefore, the total cost to rent the equipment for 3 months is $1,532.82.
Examples
Imagine you're setting up a temporary office for a project. Renting furniture, like in this problem, can be a cost-effective solution compared to buying it outright. By calculating the rental costs, including taxes, you can budget effectively and decide whether renting or buying is more economical for your specific needs. This type of calculation is also useful in other rental scenarios, such as renting equipment for events or temporary housing.
