Question

A owner increases the rent of his house by 5% at the end of each year. If currently it's rent is 2500/- per month, how much will be the rent after 2 years. ​

Answer 1

Answer:

At the end of one year , the rent will increase 5% of the current rent.

Means for the first years,

current rent = 2500

and the increase in rent will be 5% of 2500

New rent

$= (\frac{5}{100} \times 2500 ) + 2500$

$= 2625 \: per \: month$

Then for the 2nd year,

current rent = 2625

and the increase in rent will be 5% of 2625

New rent

$= ( \frac{5}{100} \times 2625) + 2625$

$= 131.25 + 2625 \\ \: = 2756.25 \: per \: month$

So, the rent at the end of the 2nd year will be 2756.25 per month.