Enter the agreed rent price ($) and the free market price ($) into the calculator to determine the Economic Rent.

## 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 ($) To calculate the economic rent, subtract the free market price by the agreed rent price. ## How to Calculate Economic Rent? The following example problems outline how to calculate Economic Rent. Example Problem #1: 1. First, determine the agreed rent price ($). In this example, the agreed rent price ($) is given as 2500. 2. Next, determine the free market price ($). For this problem, the free market price ($) is given as 2000. 3. Finally, calculate the Economic Rent using the equation above: Re = AP – FMP The values given above are inserted into the equation below: Re = 2500 – 2000 = 500 ($)

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 (\$)