Question

Dwayne Wade Company recently signed a lease for a new office building, for a lease period of 10 years. Under the lease agreement, a security deposit of $12,000 is made, with the deposit to be returned at the expiration of the lease, with interest compounded at 5% per year.

What amount will the company receive at the time the lease expires?

Answer 1

The correct answer is "$19,546.74".

Step-by-step explanation:

The given values are:

Amount,

= $12,000

Years,

= 10

Interest rate,

= 10%

Now,

The future value will be:

⇒
`Future \ value=Amount* (1+Rate)^(Years)`

On substituting the given values in the above formula, we get

⇒
`=12000* (1+5 \ percent)^(10)`

⇒
`=12000* (1+0.05)^(10)`

⇒
`=12000* (1.05)^(10)`

⇒
`=19,546.74` ($)