Korey is planning to open a comic book store. His store will cost $12,500 to open and will come with a $8,000 total annual operational cost. If his store makes $12,000 in profit during the first year, and profits increase by 6% each year from then, how long will it take for Korey to see an overall profit in his business (where total profits exceed total expenses) ? a. Korey will see an overall profit in his first year of business. b. Korey will see an overall profit in his second year of business. c. Korey will see an overall profit in his third year of business. d. Korey will see an overall profit in his fourth year of business.

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Mathematics

Andreas

Today, 06:08

Korey is planning to open a comic book store. His store will cost $12,500 to open and will come with a $8,000 total annual operational cost. If his store makes $12,000 in profit during the first year, and profits increase by 6% each year from then, how long will it take for Korey to see an overall profit in his business (where total profits exceed total expenses) ? a. Korey will see an overall profit in his first year of business. b. Korey will see an overall profit in his second year of business. c. Korey will see an overall profit in his third year of business. d. Korey will see an overall profit in his fourth year of business.

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Kiera Estrada · 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

Fifth year profit: $12,000 * 1.06^4 = $15,149.72