Suppose a new business makes a profit of $4000 in its first year, and its profit increases by 18% in each succeeding year. How much total profit did it earn in its first 6 years? Round your answer to the nearest cent.
A) $37,767.87
B) $48,566.09
C) $38,731.81
D) $28,616.84

Question

Quizplus · Accepted Answer

The total profit over the first 6 years can be calculated using the formula for the sum of a geometric series: $S_n = a \frac{1 - r^n}{1 - r}$, where $a$ is the first term, $r$ is the common ratio, and $n$ is the number of terms. Here, $a = 4000$, $r = 1.18$, and $n = 6$. Plugging these values in gives the total profit, which rounds to $37,767.87.

Suppose a New Business Makes a Profit of $4000 in Its