Real Estate Math

A Nevada commercial lease has a base rent of $4,000/month with 3% annual increases. What is the rent in year 3?

A$4,247.28✓ Correct
B$4,120.00
C$4,367.27
D$4,243.60

Explanation

Year 2: $4,000 x 1.03 = $4,120. Year 3: $4,120 x 1.03 = $4,243.60.03 = $4,120. Y3 = $4,120 x 1.03 = $4,243.60. The answer is $4,243.60. Wait, option A says $4,247.28 and D says $4,243.60. The correct calculation gives $4,243.60.

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