Rent increase

Calculate how much the rent should be increased for the tenant to cover inflation of 7% per year. The first year, the rent is 550 euros. Calculate the correct rent for the first 5 years so that you have the same rent in "loaves".

Final Answer:

a₂ =  588.5 eur
a₃ =  629.695 eur
a₄ =  673.7737 eur
a₅ =  720.9378 eur
a₆ =  771.4035 eur

Step-by-step explanation:

$$\begin{gathered} a_1=550\text{eur} \\ r=100\%+7\%=1+\frac{7}{100}=1.07 \\ {a}_2=r\cdot a_1=1.07\cdot 550=588.5\text{eur} \end{gathered}$$

$a_3=r\cdot a_2=1.07\cdot 588.5=629.695\text{eur}$

$a_4=r\cdot a_3=1.07\cdot 629.695=673.7737\text{eur}$

$a_5=r\cdot a_4=1.07\cdot 673.7737=720.9378\text{eur}$

$a_6=r\cdot a_5=1.07\cdot 720.9378=771.4035\text{eur}$

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