Question

Liam owns a business earning $43,200 in profits. These profits are appreciating at about 1.2% each year. What are Liam’s profits after six years?

Answer 1

someone help me out please

Answer 2

So you're usually told a formula for compound interest, which is \[A=P\left(1+\frac{r}{k}\right)^{tk}\]

Here you know that the principal is \[P=43200\] and the interest rate is \[r=1.2\%=0.012\] and the number of annual compoundings is \[k=1\] and you know the time is \[t=6\] Put all of these values into the formula and you get the new account value.

Once you have the new account value, you should find the difference between this and the principal. That will be the profit.