Loans & Mortgages
Total rent
The geometric sum of rent with annual increases.
The Formula
Rent total = monthly rent x 12 x ((1 + g)^years - 1) / g
The geometric sum of rent with annual increases.
| Symbol | Meaning | Unit | Notes |
|---|---|---|---|
| m | Monthly rent | currency | Rent at the start. |
| g | Annual increase | rate | Yearly rent growth rate. |
| y | Years | years | Length of the comparison. |
What Each Symbol Means
mcurrency
Monthly rent
Rent at the start.
grate
Annual increase
Yearly rent growth rate.
yyears
Years
Length of the comparison.
See It Worked With Real Numbers
A formula on its own does not tell you which number goes where. The how to calculate rent vs buy page applies this equation to a concrete case, shows every intermediate step, and names the mistakes that produce a wrong answer even when the algebra is right.
Where This Formula Appears
This equation is the working core of How To Calculate Rent Vs Buy, filed under Finance. Every number the guide produces comes from substituting into this one line.