Sandhill Co. signed a lease for an office building for a period of 10 years. Und

Question

Sandhill Co. signed a lease for an office building for a period of 10 years. Under the lease agreement, a security deposit of $9,900 is made. The deposit will be returned at the expiration of the lease with interest compounded at 11% per year.

Click here to view the factor table.

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

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

Explanation / Answer

calculate future value :

Future value = Present value*FV factor

                    = 9900*2.83942

Future value = 28110.26

Amount at the time the lease expires is $28110.26

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