An investor just purchased an office building for $100,000. he knows for certain that he can sell the building for $110,000 in five years. approximately how much does he need to charge in annual rent in order to achieve a 15% annual return on the deal (rounded to the nearest hundred dollars)?

$13,000 per year

Explanation:

The annual return on the deal will needs to be 15%

the return would be:

Because we are asked to fullfil an annual rate and this is a 5 years project:

the return would be 0.15 * 5 years

Now posting the know values on the formula

We have to sovle for the rent

So 10,000 + 5YearsRent = 0.15*5*100,000

                    5YearsRent = 75,000 - 10,000

                    5YearsRent = 65,000

Now we have to divide by 5 year, because that would be the return for 5 years.

                  Rent = $65,000/5 years = $13,000 per year