you rent an apartment that costs $1600 per month during the first year, but the rent is set to go up 12.5%…

you rent an apartment that costs $1600 per month during the first year, but the rent is set to go up 12.5% per year. what would be the rent of the apartment during the 10th year of living in the apartment? round your answer to the nearest whole number.

you rent an apartment that costs $1600 per month during the first year, but the rent is set to go up 12.5% per year. what would be the rent of the apartment during the 10th year of living in the apartment? round your answer to the nearest whole number.

Answer

Explanation:

Step1: Identify the formula

The formula for compound - growth is $A = P(1 + r)^{n}$, where $P$ is the initial amount, $r$ is the rate of growth as a decimal, and $n$ is the number of years. Here, $P = 1600$, $r=0.125$, and $n = 9$ (since we are finding the rent in the 10th year, so the number of growth - periods is 9).

Step2: Substitute the values

$A=1600\times(1 + 0.125)^{9}$. First, calculate $(1 + 0.125)=1.125$. Then, find $1.125^{9}$. $1.125^{9}\approx2.755625$.

Step3: Calculate the final amount

$A = 1600\times2.755625=4408.9999\approx4409$.

Answer:

$4409$