Question

Dwayne Wade Company recently signed a lease for a new office building, for a lease period of 11 years. Under the lease agreement, a security deposit of $13,740 is made, with the deposit to be returned at the expiration of the lease, with interest compounded at 10% per year.

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

Answer 1

$39,202

Step-by-step explanation:

Data provided in the question

Lease period = 11 years

Security deposit = $13,740

So by considering the above information

The company received amount when the lease expired is

= Principal amount × compound interest factor at 10% for 11 years

= $13,740 × 2.85312

= $39,202

Refer to the compound interest factor table