Question

In 1998, the construction cost of each room for Godvin Inn was $150,000. After fifteen years, the management of the hotel wishes to have improvements in all of the rooms to catch the recent trends. The total cost of the project is estimated as $10 million for 50 rooms in 2013. Based on the information given, calculate the percentage in price of each room from 1998 to 2012? Group of answer choices 30.33% 50.50% 45.00% 33.33%

Answer 1

Solution:

Construction cost of each room in 1998 = $150,000

Construction cost per room in 2013 = $10,000,000 / 50 = $200,000

Percentage increase in price of each room from 1998 to 2012 = ($200,000 - $150,000) / $150,000 = 33.33%

Hence last option is correct.