A building permit application is submitted for a $2.8 million commercial project. The local building department permit fee is calculated at 0.65% of construction value. What is the permit fee?
Correct Answer
A) $18,200
Permit fee = Construction value × Fee percentage = $2,800,000 × 0.0065 = $18,200. This calculation determines the cost of obtaining the required building permit.
Why This Is the Correct Answer
Option A is correct because it properly calculates the permit fee by multiplying the construction value by the percentage rate. The calculation is $2,800,000 × 0.0065 = $18,200. This represents 0.65% of the total project value, which is the standard method for calculating percentage-based permit fees. The decimal conversion of 0.65% to 0.0065 is crucial for accurate calculation.
Why the Other Options Are Wrong
Option B: $1,820
This answer results from incorrectly using 0.65 as a decimal multiplier instead of converting the percentage properly. Using $2,800,000 × 0.00065 = $1,820 represents 0.065% rather than 0.65%, making it ten times too small.
Option C: $28,000
This answer appears to use 1% instead of 0.65% as the fee rate. The calculation $2,800,000 × 0.01 = $28,000 represents a 1% fee rather than the specified 0.65% fee rate.
Option D: $4,308
This answer likely results from calculation errors in decimal placement or incorrect percentage conversion. It doesn't correspond to any logical percentage of the $2.8 million construction value when using the given 0.65% rate.
Memory Technique
Remember 'Percentage Problems': Point (decimal) Placement is Paramount. Always move the decimal point two places left when converting percentages to decimals for multiplication.
Reference Hint
Florida Building Code, Chapter 1 - Scope and Administration, Section on Permits and Fees, or local building department fee schedules
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