# Thread: Total Rent Amount when there is an annual growth rate for rent

1. ## Total Rent Amount when there is an annual growth rate for rent

Say the monthly rent is \$1000 and terms of the rent state that there is an annual increase in rent for 5%. If I were to find the total rent paid in 5 years, how would I do that

I at first tried using FVIFGA, future value interest factor of growing annuity where I used an interest rate of 0% a growth rate of 5% and for 5 period that did not work out

Can anyone here help me out with this one please ?

2. ## Re: Total Rent Amount when there is an annual growth rate for rent

12000*(1.05^0 + 1.05^1 + 1.05^2 + 1.05^3 + 1.05^4) = 66307.575.....

Another way:
12 * [(1000*1.05^5 - 1000*1.05^0) / .05]

3. ## Re: Total Rent Amount when there is an annual growth rate for rent

Originally Posted by Wilmer
12000*(1.05^0 + 1.05^1 + 1.05^2 + 1.05^3 + 1.05^4) = 66307.575.....

Another way:
12 * [(1000*1.05^5 - 1000*1.05^0) / .05]
Hey Wilmer, How in the world do you come up with these formulae
Do you teach Business Math some place
Are you an accountant

4. ## Re: Total Rent Amount when there is an annual growth rate for rent

Originally Posted by dexteronline
Hey Wilmer, How in the world do you come up with these formulae
Do you teach Business Math some place
Are you an accountant
I'm a retired financial analyst; hence worked quite a bit with financial formulae.
By the way, these are really fairly easy/simple...I ain't no guru!