Although in reality a firm may own the capital that it uses, economists typically refer to the ongoing cost of employing capital as the rental rate because the opportunity cost of employing capital is the income that a firm could receive by renting it out. Thus, the price of capital is the rental rate.Click to see full answer. In this manner, what is the rental rate?rental rate. The periodic charge per unit for the use of property. The rental rate may be a certain amount per square foot per year (even though paid monthly),per square foot per month,per room, per apartment,or any number of other variations.Additionally, how do you calculate implicit rental rate? In order to find the interest rate that is “implicit” or “implied” in this agreement, you need to do a mathematical calculation. The formula you will use is total amount paid/amount borrowed raised to 1/number of periods = x. Then x-1 x100 = implicit interest rate. Moreover, what is rent capital? Gross rent refers to the rent paid for the services of land and the capital invested on it. It consists of economic rent, interest on capital invested for improvement of land, and reward for the risk taken by the landlord in investing his or her capital.How much is too much for rent?One suggestion, provided by Metropolitan Life Insurance Company, is to spend no more than 25 percent of your monthly gross income on your rent. For example, if your annual salary is $30,000 per year, or $2,500 per month, you shouldn’t plan to spend more than $625 per month on rent.
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