The rent of the apartment per month = $900.
Each year the rent will increase at a rate of 5.5%.
We have to find what will be the rent after 7 years. To find that we will use compound interest formula here.
The formula is [tex] A = P(1+r)^t [/tex]
Where, A is the last amount including interest, P = principal amount, r = rate of interest, t = number of years.
Here, P = $900, r = 5.5% = [tex] \frac{5.5}{100} [/tex]= 0.055, t = 7
By substituting the values in the formula we will get,
[tex] A = 900(1+0.055)^7 [/tex]
[tex] A = 900(1.055)^7 [/tex]
[tex] A = 1309.2 [/tex] (Approximately taken upto nearest tenth)
We have got the required answer.
After 7 years the rent will be $1309.2.
