Illinois Real Estate Practice Exam

If Graham Office Supply Store paid $1500 monthly rent plus 3% on all sales over $150,000 and a total rent of $25,000 annually, what were the total sales for the store?

1. A. $200,000

2. B. $316,667

3. C. $383,333

4. D. $410,000

The correct answer is: C. $383,333

To determine the total sales for the Graham Office Supply Store, we first analyze the components of the rent payment structure. The store pays a fixed monthly rent of $1,500, which totals to $18,000 annually (calculated as $1,500 multiplied by 12 months). Since the total annual rent is $25,000, we can find the excess rent due to the percentage on sales over $150,000. By subtracting the base rent from the total rent, we find that the additional amount paid due to the sales percentage is $25,000 minus $18,000, which equals $7,000. Next, we know that the additional rent is charged at a rate of 3% on sales exceeding $150,000. Let’s denote total sales as \( S \). The sales over $150,000 can be expressed as \( S - 150,000 \). The 3% on these excess sales can be set up in an equation: \[ 0.03(S - 150,000) = 7,000 \] To solve for \( S \), first isolate the term \( S - 150,000 \): \[ S - 150,000 = \frac