A Building Owner Charges Net Rent of $20 in the First

question 22

Multiple Choice

A building owner charges net rent of $20 in the first year, $21 in the second year, and $22 in the third year. Using a 10 percent discount rate, what is the effective rent over the three years?

• A) $20.00
• B) $20.94
• C) $21.00
• D) $21.73
• E) $22.00

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Definitions:

Principal's Affairs

Matters or business activities that are managed or acted upon by an agent on behalf of a principal.

Liable

Legally responsible or obligated, often in the context of paying compensation for harm or damages.

Agency Relationship

A relationship between two parties in which one party (the agent) agrees to represent or act for another party (the principal).

Restatement (Third)

A reference to the third series of the Restatements of the Law, which are authoritative summaries of common law in the United States, aimed at clarifying, modernizing, and improving the law.