Jim is a junior in high school. His parents want him to learn money and business management skills while he attends college. They plan to buy a house worth $150,000 at the end T3, so Jim can live in one bedroom and rent out the remaining bedrooms.
Rent will be collected in each of the years T4 through T7. If the rent is $X in T4, the rent will be 3% higher in T5, etc. (i.e., rent increases by 3% each year). Assume rent is collected annually, at the end of each year (T4 - T7).
At the end of T7, they anticipate selling the house for $155,000. How much can Jim expect in annual rent in T4 (i.e., what is $X)?
R=10%
How would I set this up using PVIF or the other combination methods?