Question

A developer purchased three oceanfront lots, each measuring 75 by 110 feet, for $20 per square foot. The developer later sold the lots for $200,000 each. What was the developer's percentage of profit on the sale of the three lots? (Round to nearest percentage.)

Answer 1

Answer: 21%

Explanation: The developer purchased 3 properties and he can buy each property for $20 per square foot.

Therefore: 75 × 110 =8250 square feet.

8250 × $20 = $165 000 per lot.

Each lot was sold for $200 000. Which means the developer made profits of:

$200 000 - $165 000 = $35 000 per lot.

The percentage of profit on each lot is:

Percentage of profit on cost amount:

= $\frac{35 000}{165 000}$

= 0.2121212 recurring × 100

= 21,21%

Percentage of profit on sale amount:

= $\frac{35000}{200000}$

= 0.175 × 100

= 17,5%