Murphy's annual income has increased by 10% per year for the last 8 years. If Murphy's annual income is now $72,596, what was it 8 years ago?
A) $14,519
B) $33,867
C) $41,587
D) $51,922
E) $58,077

Question

Quizplus · Accepted Answer

To find Murphy's income 8 years ago, we can use the formula for exponential decay, which in this context is the reverse of growth: $P = \frac{A}{(1 + r)^n}$, where $P$ is the principal amount (initial income), $A$ is the amount after $n$ years (final income), $r$ is the rate of increase, and $n$ is the number of years. Plugging in the values: $P = \frac{72,596}{(1 + 0.10)^8}$, which simplifies to approximately $33,867.

Murphy's Annual Income Has Increased by 10% Per Year for the Last