Solve the problem.
-A small business owner made $30,000 the first year he owned his store and made an additional 2% over the previous year in each subsequent year. Find how much he made during his fourth year of business.
Find his total earnings during the first four years. (Round to the nearest cent, if necessary.)
A)$31,836.24; $123,648.24
B)$0.24; $30,612.24
C)$51,840.00; $161,040.00
D)$62,208.00; $223,248.00

Question

Quizplus · Accepted Answer

The earnings for the fourth year can be calculated using the formula for compound interest: $P(1 + r)^n$, where $P$ is the principal amount ($30,000), $r$ is the annual rate (2% or 0.02), and $n$ is the number of years. For the fourth year, $n = 3$ (since the increase starts after the first year), so the calculation is $30,000(1 + 0.02)^3 = 30,000(1.061208) = \$31,836.24$. To find the total earnings over the four years, add the earnings of each year, which are $30,000 for the first year, $30,600 for the second year, $31,212 for the third year, and $31,836.24 for the fourth year, totaling approximately $123,648.24.

Solve the Problem. -A Small Business Owner Made $30,000 the First Year He