Question

Please help me!

You have the opportunity to lease space for your business. The property owner has proposed a four year lease with a rent of $29,000 per year. If a proposed rent increase is 2% per year what will the annual rent be at the end of four years? A.)$13,200 B.)$22,000 C.)$31,390 D.)$32,440​

Answer 1

C.)$31,390

Explanation:

You can use the formula to calculate the future value to find the answer:

FV=PV*(1+i)^n

FV= future value

PV= present value= 29,000

i= interest rate=2%

n= number of periods of time= 4

Now, you can replace the values in the formula:

FV=29,000*(1+0.02)^4

FV=29,000*(1.02)^4

FV=31,390

According to this, the answer is that the annual rent would be $31,390 at the end of four years.