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?

Answer 1

First year profit: $1000*12 = $12,000
Second year profit: $12,000 * 1.06
Third year profit: $12,000 * 1.06^2
Fourth year profit: $12,000 * 1.06^3
Fith year profit: $12,000 * 1.06^4 =$15,149.72
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