Question

An owner increases the rent of his house by $5\%$ at the end of each year. If currently, its rent is $Rs.2500$ per month, how much will be the rent after $2$ years?

Answer 1

Current rent $=Rs2500,$ percent increase per year $=5$%

After $1$ year,

Rent $=2500+5\%$ of $2500$=2500+\left( \cfrac { 5 }{ 100 } \right) \times 2500$

Rent $=Rs.2625$

After $2$ years,

Rent $=2625+5\%$ of $2625$ $=26250+\left(\frac{5}{100}\right)\times 2625$

Rent $=Rs.2756.25$

$\therefore$ Rent will be $Rs.2756.25$ after $2$ years.