Enter the agreed rent price ($) and the free market price ($) into the calculator to determine the Economic Rent.
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Economic Rent Formula
The following formula is used to calculate the Economic Rent.
Re = AP – FMP
- Where Re is the Economic Rent ($)
- AP is the agreed rent price ($)
- FMP is the free market price ($)
How to Calculate Economic Rent?
The following example problems outline how to calculate Economic Rent.
Example Problem #1:
- First, determine the agreed rent price ($). In this example, the agreed rent price ($) is given as 2500.
- Next, determine the free market price ($). For this problem, the free market price ($) is given as 2000.
- Finally, calculate the Economic Rent using the equation above:
Re = AP – FMP
The values given above are inserted into the equation below:
Re = 2500 – 2000 = 500 ($)
Example Problem #2:
The variables needed for this problem are provided below:
agreed rent price ($) = 2250
free market price ($) = 2100
Entering these values and solving gives:
Re = 2250 – 2100 = 150 ($)
