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

Accepted Solution

Answer:option AStep-by-step explanation:given,Korey expects to average $1,000 of profit each monthfirst 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 × 1.06²Fourth year profit:    $12,000 × 1.06³Fifth year profit:        $12,000 × 1.06⁴                                  =$15,149.72Profit of Korey expected after fifth year is equal to $15,149.72.Hence the correct answer is option A