Which of the following is the correct method for calculating rent owed for a variable lease?

For a variable lease, the rent changes based on a specified index, typically tied to inflation or the cost of living. The method to calculate the rent owed involves comparing the new index to the original index to determine the adjustment proportionally.

The correct method involves taking the new index, dividing it by the original index, and then multiplying that result by the original rent. This process effectively scales the original rent by the ratio of the new index to the original index, ensuring that the rent reflects the changes in the economic conditions represented by the index.

This means that as the index increases or decreases, the rent will adjust accordingly. By using this approach, landlords and tenants can maintain an equitable rental amount that aligns with market conditions over time.