Real Estate Math

A Washington commercial building leases at $28/SF/year on 4,500 SF with a 5% annual rent increase. What is the rent at the start of year 3?

A$129,780
B$132,300
C$138,915✓ Correct
D$141,435

Explanation

Year 1: 4,500 × $28 = $126,000. Year 2: $126,000 × 1.05 = $132,300. Year 3: $132,300 × 1.05 = $138,915.

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