## Rent Stability

As usual, I wasn’t thrilled when my landlord told me about this year’s rent increase.  As someone familiar with how exponential growth works, I understand the power of the small, consistent percent increase.

After some mild protests, the landlord came back with some good news:  he was going to reduce my increase by $25 per month! I wasn’t exactly thrilled with that, either, but it’s a gesture. And I thought to myself “At least I won’t be paying future increases on that$25!”

Which got me thinking:  if my rent goes up 3% every year, how much of a difference will that $25 make? The answer: not much. In my lifetime, anyway. At 3% per year, the$25 difference in rent now will be a $30 difference in 5 years. In 15 years, the difference in the two rents will be around$40.  And if I stick around for 50 years, the difference will be about $90. If I could stay here for 200 years, I’d see a big difference: almost$10,000!  But then again, my rent would be around $1 million per month. I’ll have to be content knowing that, while in the short term I don’t see much benefit, I win out as t goes to infinity. Click here to see more in Application. www.MrHonner.com ### 4 Comments 1. Fawn Nguyen says: Maybe I see a math problem for students. What is your rent now based on given info? 2. MrHonner says: It’s a good question, one that I was actually wondering myself initially. It’s also interesting (and perhaps surprising) that some of the given information tells you nothing about the current rent. 3. flyingcoloursmaths says: I think you’re measuring the wrong thing! You’ll save$300 this year, $309 next year and so on – a geometric series. Over n years, I reckon you save 10,000(1.03^n – 1). That’s$3,500 over a decade, which isn’t bad at all

4. MrHonner says:

I appreciate your positive outlook. One person’s exponential growth is another’s exponential decay, I guess!