BE2-19 Porter Company signed a lease for an office building for a period of 10 years. Under
the lease agreement, a security deposit of $10,000 is made. The deposit will be returned at the
expiration of the lease with interest compounded at 5% per year. What amount will Porter receive
at the time the lease expires?
Assume the $10,000 is deposited at time t=0 then after one year (t=1) the deposit will have accumulated to $10,000 x 1.05 = ...
A compounding interest problem is solved and explained.