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 ($)

To calculate the economic rent, subtract the free market price by the agreed rent 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 ($)