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. a. 0.33%
b. 50.50%
c. 45.00%
d. 33.33%

d. 33.33%

Explanation:

The computation of the percentage in the price of each from the year 1998 to the year 2012 is shown below:

= (Renovation cost in 2012- construction cost in 1998 ) ÷ (construction cost in 1998)

= ($10 million ÷ 50 rooms - $150,000) ÷ ($150,000)

= ($200,000 - $150,000) ÷ ($150,000)

= ($50,000) ÷ ($150,000)

= 33.33%

Hence, the correct option is d. 33.33%

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