PLEASE PROVIDE THE CORRECT ANSWER WITH EXPLANATION

Suppose we have a 3-year gross lease with a flat rent of $20 per square foot each year with the lessor responsible for payment of all operating expenses. Expenses are estimated to be $4 per square foot during the first year and Increase by $1 per square foot per year for the following two years. Assuming a discount rate of 10%, which of the following is the closest to the effective rent of this lease. O $14.38 $15.06 $16.29 $20.00