Question

A owner increases the rent of his house by 5% at the end of each year. If currently it's rent is rupee 2500per month, how much will be the rent after two years

Answer 1

Current Rent = 2500
Increase after end of first year = 5% * 2500 = 0.05 * 2500 = 125
Rent after first year = 2500 + 125 = 2625 per month

Increase after the end of second year = 5% * 2625 = 0.05 * 2625 = 131.25
Rent after the second year = 2625 + 131.25 = Rs 2756.25