Answer:
The rent of the apartment during the 7th year of living in the apartment is $2,414 per month (or $28,968 for the whole full year)
Step-by-step explanation:
Here, we are to estimate the cost of an apartment in the 7th year of living in the apartment, given the cost per month in the first year.
Now, since the cost per month in the first year is $1200, the cost per year will be 1200 * 12 = $14,400
Now to calculate the cost at the 7th year, we shall need to model and exponential equation. This is;
C = I(1+r)^t
where C is the cost per year
I is the cost in the first year which is $14,400
r is the increment percentage = 10.5% or simply 10.5/100 = 0.105
and t is the year in question which is 7
Plugging these values we have;
C = 14,400(1 + 0.105)^7
C = 14,400 (1.105)^7
C = 28,966.66 which is approximately $28,967
Thus the cost per month in the 7th year will be 28,967/12 = 2,413.9 which is approximately $2,414
