Question

Korey is planning to open a comic book store. In his first year of operation, Korey expects to average $1,000 of profit each month. He then expects profits to increase by 6% each year for the next 4 years. How much does Korey expect to make in profits in his fifth year of operation?

a. $15,149.72
b. $16,058.71
c. $31,120.46
d. $32,987.69

Answer 1

A! Took the test on edge

Explanation:

Answer 2

option A

Explanation:

given,

Korey expects to average $1,000 of profit each month

first year profit from the comic book store = $1000 × 12

= $12,000

now for next four year profit will increase by 6%

Second year profit: $12,000 × 1.06

Third year profit: $12,000 × 1.06²

Fourth year profit: $12,000 × 1.06³

Fifth year profit: $12,000 × 1.06⁴

=$15,149.72

Profit of Korey expected after fifth year is equal to $15,149.72.

Hence the correct answer is option A