A contractor fails to pay subcontractors $45,000 on a project with a total contract value of $180,000. What percentage of the total contract value does the unpaid amount represent?
Correct Answer
A) 25%
Percentage = ($45,000 ÷ $180,000) × 100 = 25%. This calculation is important for understanding lien exposure and financial management.
Why This Is the Correct Answer
$45,000 ÷ $180,000 = 0.25 = 25%. This straightforward percentage calculation shows that the unpaid subcontractor amount is exactly one-quarter of the total contract value.
Why the Other Options Are Wrong
Option B: 20%
20% would equal $36,000 of the $180,000 contract ($180,000 × 0.20 = $36,000), not $45,000. This is an incorrect calculation.
Option C: 30%
30% would equal $54,000 of the $180,000 contract ($180,000 × 0.30 = $54,000), not $45,000. This answer overstates the unpaid proportion.
Option D: 35%
35% would equal $63,000 of the $180,000 contract ($180,000 × 0.35 = $63,000), not $45,000. This is significantly higher than the actual unpaid amount.
Memory Technique
Quick check: $180,000 ÷ 4 = $45,000. So $45,000 is exactly 1/4 of $180,000 = 25%. When numbers divide evenly, use fractions to double-check your percentage.
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