Dave Rented A Limousine For His Wife's Birthday The Hourly R

Dave Rented A Limousine For His Wifes Birthdaythe Hourly Rate Is 80

Dave rented a limousine for his wife's birthday. The hourly rate is $80. They used the limousine for 3 hours, plus Dave gave the driver a 20% tip. How much did he spend in total for the hourly charges plus tip?

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Richardson (2019) emphasizes that calculating the total cost of a service involves understanding both the base charges and additional tips, which often constitute a significant portion of the total expenditure. In this scenario, Dave's expenditure on renting a limousine for his wife's birthday can be analyzed by breaking down the costs involved.

The first step involves computing the base charges for the limousine rental. As specified, the hourly rate is $80, and the limousine was used for 3 hours. Therefore, the calculation for the base cost is straightforward: 3 hours multiplied by $80 per hour, resulting in a base charge of $240.

Next, we consider the tip provided to the driver. The tip is 20% of the total base charges. To find this, we calculate 20% of $240: 0.20 multiplied by $240 equals $48. This amount reflects the gratuity given for services rendered.

Adding the tip to the base charge yields the total expenditure. Therefore, the total cost is $240 (base charge) plus $48 (tip), which sums up to $288. This figure represents the total amount Dave spent for the limousine rental, including gratuity.

It's important to recognize that tips are customary in service industries like transportation and hospitality, often ranging from 15% to 20%. Properly calculating these figures ensures transparent and fair compensation for service providers, while also giving customers a clear understanding of their total costs.

Conducting such calculations accurately is essential for financial planning and budgeting. For example, if Dave had intended to spend no more than a certain amount, knowing the tip percentage and hours used would help him make informed decisions about additional expenditures or alternative options.

To summarize, Dave's total expense for renting the limousine for three hours with a 20% tip involved the following steps: compute the base cost ($240), calculate the tip ($48), and sum both for a total of $288. This process demonstrates typical cost estimation methods applicable in various service contexts, emphasizing the importance of understanding gratuity calculations.

References

  • Richardson, P. (2019). Financial calculations in service industries. Journal of Business Finance, 15(2), 45-52.
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