What is the total term rent for a two-year lease at $1000 a month with a 5% monthly payment escalation in the second year?

What is the total term rent for a two-year lease at $1000 a month with a 5% monthly payment escalation in the second year?

• A. $24,600
• B. $22,000
• C. $26,000
• D. $28,200

Answer: (A)

To determine the total term rent for a two-year lease priced at $1,000 a month with a 5% increase in the monthly payment during the second year, we can break it down as follows. In the first year, the rent is straightforward. Since the monthly rent is $1,000, for 12 months, the total rent for the first year would be: $1,000 x 12 = $12,000. In the second year, the monthly rent increases by 5%. Therefore, we calculate the new monthly rent as follows: $1,000 x 0.05 = $50 (the increase). So, the new monthly rent for the second year becomes: $1,000 + $50 = $1,050. For the second year, we again multiply by 12 months to find the total rent for that year: $1,050 x 12 = $12,600. Now, to find the total rent over the two-year lease, we add the total from both years: $12,000 (first year) + $12,600 (second year) = $24,600. This calculation provides the total term rent for the entire two-year lease period, confirming that

To determine the total term rent for a two-year lease priced at $1,000 a month with a 5% increase in the monthly payment during the second year, we can break it down as follows.

In the first year, the rent is straightforward. Since the monthly rent is $1,000, for 12 months, the total rent for the first year would be:

$1,000 x 12 = $12,000.

In the second year, the monthly rent increases by 5%. Therefore, we calculate the new monthly rent as follows:

$1,000 x 0.05 = $50 (the increase).

So, the new monthly rent for the second year becomes:

$1,000 + $50 = $1,050.

For the second year, we again multiply by 12 months to find the total rent for that year:

$1,050 x 12 = $12,600.

Now, to find the total rent over the two-year lease, we add the total from both years:

$12,000 (first year) + $12,600 (second year) = $24,600.

This calculation provides the total term rent for the entire two-year lease period, confirming that