Ahardware store makes a profit of $30,000 during its first year. the store owner sets a goal of increasing profits by $4000 each year for 6 years. assuming that this goal is met, find the total profit during the first 7 years of business.

$294,000

Explanation:

Data provided in the question:

Profit during the first year = $30,000

Increase in profit each year = $4,000

Now,

Profit for the current year = Profit for the previous year + $4,000

Therefore,

Year                 Current year profit

1                           $30,000

2                           $34,000                   [$30,000 + $4.000]

3                           $38,000                   [$34,000 + $4.000]

4                           $42,000                   [$38,000 + $4.000]

5                           $46,000                   [$42,000 + $4.000]

6                           $50,000                   [$46,000 + $4.000]

7                           $54,000                   [$50,000 + $4.000]

Hence,

The total profit during the first 7 years of business = ∑ (Current year profit)

= $30,000 + $34,000 + $38,000 + $42,000 + $46,000 + $50,000 + $54,000

= $294,000

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