Final answer:
Aleena rents a suite and pays $1070 in monthly rent in advance with 11.8% compounded .The cash value of the property is approximately $906.23.
Step-by-step explanation:
To determine the cash value of the property, we need to calculate the present value of the monthly rent payments. Since the rent is paid in advance, we can use the formula for the present value of an annuity:
Present Value = Monthly Rent Payment x ((1 - (1 + interest rate)^(-number of periods)) / interest rate)
Plugging in the values, we get:
Present Value = $1070 x ((1 - (1 + 0.118)^(-1)) / 0.118) = $1070 x ((1 - 1.118^(-1)) / 0.118) = $1070 x (1 - 0.900) / 0.118) = $1070 x (0.100 / 0.118) = $1070 x 0.8475 = $906.23
Therefore, the cash value of the property is approximately $906.23.