Question

In 2015, Mark spent $2,300 on his health care. If this amount increased by 9 percent per year, what would be the amount Mark will spend in 2032? (Exhibit 1-A, Exhibit 1-B, Exhibit 1-C, Exhibit 1-D)

Answer 1

Given a 9 percent annual increase, the amount Mark will spend on his healthcare in 2032 is calculated by the formula for compound interest which results in approximately $10,039.50.

Step-by-step explanation:

To calculate the amount Mark will spend on healthcare in 2032 after experiencing a 9 percent increase per year since 2015, we can use the formula for compound interest:

A = P(1 + r)^n

where:
A = the future value of the investment/loan, including interest
P = the principal investment amount (the initial amount of money)
r = the annual interest rate (decimal)
n = the number of years the money is invested or borrowed for

In Mark's case, P = $2,300, r = 9% or 0.09, and n = 2032 - 2015 = 17 years.

So the calculation is:

A = $2,300(1 + 0.09)^17
A = $2,300(1.09)^17
A = $2,300(4.365)
A = $10,039.50

Therefore, Mark will spend approximately $10,039.50 on his healthcare in 2032.

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