A Colorado documentary fee of $0.01 per $100 of the purchase price is paid upon recording of any conveyance deed. What is the amount per $100?

A Colorado documentary fee of $0.01 per $100 of the purchase price is paid upon recording of any conveyance deed. What is the amount per $100?

• A. $0.01 per $100
• B. $1.00 per $100
• C. $0.50 per $100
• D. $0.10 per $100

Answer: (A)

The concept being tested is how a per-$100 documentary fee is calculated. Saying $0.01 per $100 means for every hundred dollars of the purchase price, you pay one cent. In other words, the fee per dollar is 0.0001, so total fee = purchase price × 0.0001. For example, a $350,000 purchase would incur 350,000 × 0.0001 = $35. Another way to see it: the fee is simply $0.01 for each $100 of price.

The concept being tested is how a per-$100 documentary fee is calculated. Saying $0.01 per $100 means for every hundred dollars of the purchase price, you pay one cent. In other words, the fee per dollar is 0.0001, so total fee = purchase price × 0.0001. For example, a $350,000 purchase would incur 350,000 × 0.0001 = $35. Another way to see it: the fee is simply $0.01 for each $100 of price.