A landlord bought a property for ₹12,00,000. He wants to earn a 10% annual return on his investment after paying ₹2,500 per month for maintenance. What should be the monthly rent he charges?

Correct Answer: ₹12,500

To find the required monthly rent, we need to calculate the landlord's total desired annual income, accounting for both his expected annual return and his annual maintenance costs.

Step 1: Calculate the desired annual return on the investment.
The property purchase price is ₹12,00,000 and the landlord wants to earn a 10% annual return on this investment.

$\text{Annual Return}=10\%\text{of}\mathrm{12,00,000}$

$\text{Annual Return}=\frac{10}{100}\times \mathrm{12,00,000}=\text{₹1,20,000}$

Step 2: Calculate the total annual maintenance cost.
The maintenance cost is ₹2,500 per month. Over a year (12 months), the total maintenance cost will be:

$\text{Annual Maintenance}=\mathrm{2,500}\times 12=\text{₹30,000}$

Step 3: Calculate the total annual rent required.
The landlord needs to earn enough total annual rent to cover both the desired return and the annual maintenance expenses:

$\text{Total Annual Rent}=\text{Annual Return}+\text{Annual Maintenance}$

$\text{Total Annual Rent}=\mathrm{1,20,000}+\mathrm{30,000}=\text{₹1,50,000}$

Step 4: Calculate the required monthly rent.
To find the monthly rent, divide the total annual rent by 12 months:

$\text{Monthly Rent}=\frac{\mathrm{1,50,000}}{12}=\text{₹12,500}$

Therefore, the landlord should charge a monthly rent of ₹12,500.