Question

In 2007, Joelle spent $6,200 on her health care. If this amount increased by 3 percent per year, what would be the amount Joelle spent in 2017 for the same health care? Hint: Use Exhibit 1-A, Exhibit 1-B, Exhibit 1-C, Exhibit 1-D. (Round the discount factor to 3 decimal places and final answer to 2 decimal places.)

Answer 1

Approximately $8,122.76.

Explanation:

To calculate the amount Joelle spent in 2017 for the same health care, we need to apply the 3 percent annual increase to the initial amount of $6,200. Here's how you can calculate it:

Calculate the annual increase:

Annual increase = Initial amount * Annual growth rate

Annual increase = $6,200 * 0.03

Calculate the new amount for each year:

Year 2007: $6,200

Year 2008: $6,200 + Annual increase

Year 2009: Year 2008 amount + Annual increase

...

Year 2017: Year 2016 amount + Annual increase

To calculate the amount Joelle spent in 2017, we need to iterate through the years, adding the annual increase to the previous year's amount. Here's a step-by-step calculation:

Year 2007: $6,200

Year 2008: $6,200 + ($6,200 * 0.03) = $6,200 + $186 = $6,386

Year 2009: $6,386 + ($6,386 * 0.03) = $6,386 + $191.58 = $6,577.58

...

Year 2016: $7,886.18

Year 2017: $7,886.18 + ($7,886.18 * 0.03) = $7,886.18 + $236.58 = $8,122.76

Therefore, the amount Joelle spent in 2017 for the same health care would be approximately $8,122.76.