The equation P = 10,000 + 1,075t represents the anticipated profit after t years for a store the owner opens in town A. Let’s break this down:
- P: This is the profit earned by the store.
- 10,000: This is the initial profit that the business owner expects to make right from the start.
- 1,075t: This represents the additional profit earned each year, with t being the number of years the store has been operating.
The business owner later opens store B six months after store A. This means that for the first six months, store B will not generate any profit, but once it begins operating, its profit trajectory will be based on a similar equation—though we may need additional information to establish that equation. In summary, the profit from store A increases linearly over time, illustrating the growth potential of the business. Understanding this equation helps the owner forecast future profits and make informed decisions about the business’s trajectory.