Joe has excitedly accepted a scholarship to attend Ivy State University. His scholarship covers tuition for his next four years of his program, but he has to plan for his own housing expenses. After looking at the neighborhoods closest to the school, he has narrowed his choices down to just two options. Both options charge $750 per month for the first year; both options have price-increases built-in for multi-year tenants. One option will increase the rent by $70 per month for each subsequent year while the other will increase the rent by 7% for each year of residency.
If the apartments are otherwise equal and Joe intends to live here for the duration of his schooling, but no more, which option should he choose and why?
Group of answer choices
Unable to determine with the given information.
Joe should take the apartment with the $70 increase each year. Adding a fixed amount always comes out less than adding a %.
Joe should take the apartment that increases by 7% each year because he will be paying less for rent in his senior year.
Both options result in the same rent by the 4th year of school, it doesn't matter which he chooses.
Joe should take the apartment that increases rent by $70 each year because he will be paying less for rent in his senior year.