To determine the amount that must be added to Rowan's gross pay under the lease-value rule, we can follow a step-by-step method. Here are the detailed steps:
1. Identify the personal miles driven:
- Rowan drove a total of 22,000 miles.
- Out of these, 3,000 miles were for personal use.
2. Determine the employer's charge per mile for personal use:
- The employer charges Rowan 5.5 cents per mile for personal use.
- 5.5 cents can be converted to dollars as [tex]\( \$0.055 \)[/tex] per mile.
3. Calculate the total cost for personal use:
- Multiply the number of personal miles by the charge per mile:
[tex]\[
\text{Total Personal Use Cost} = 3{,}000 \text{ miles} \times \$0.055 \text{ per mile}
\][/tex]
- Performing the multiplication yields:
[tex]\[
\text{Total Personal Use Cost} = \$165.00
\][/tex]
4. Round to the nearest cent:
- In financial calculations, it is common to round to the nearest cent (two decimal places).
- Here, \[tex]$165.00 is already rounded to the nearest cent.
5. Total amount to be added to Rowan's gross pay:
- The total personal use cost calculated above is the amount that needs to be added to Rowan's gross pay:
\[
\text{Gross Pay Addition} = \$[/tex]165.00
\]
So, the amount that must be added to Rowan's gross pay for 2023 is \$165.00.
