Question

Liam Company signed a lease for an office building for a period of 10 years. Under the lease agreement, a security deposit of $7,300 is made. The deposit will be returned at the expiration of the lease with interest compounded at 7% per year.

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(For calculation purposes, use 5 decimal places as displayed in the factor table provided.)

What amount will Liam receive at the time the lease expires? (Round answer to 2 decimal places, e.g. 25.25.)

Amount at the time the lease expires

$

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Answer 1

Since you have not provided table I am calculating future value factor using calculator.

Life is 10 year , rate is 7%.

Future value of $1 for 10 year @ 7 % = (1.07)¹⁰

^{= 1.96715}

^{so future value of deposit = $7300*1.96715 = $14360.19 or $14360.20}

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