Short Answer 
To calculate the growth rate of Korey’s net income, use the formula: (4th Year Income – 3rd Year Income) / 3rd Year Income, resulting in an 8% growth rate. The expected income for the fourth year, calculated as 17,950.90 x (1 + 0.08), yields approximately $19,386.97, and verification of the calculations is crucial for accuracy.
Step 1: Calculate the Growth Rate
To determine the growth rate of Korey’s net income, use the formula:
- Growth Rate = (4th Year Income – 3rd Year Income) / 3rd Year Income
- In this case, substitute the values:
- (17,950.90 – 16,621.20) / 16,621.20 = 0.08 or 8%
Step 2: Compute the Expected Income
Once you have the growth rate, the next step is to compute the expected income for the fourth year using the previous year’s income.
- Calculation: Expected Income = 4th Year Income x (1 + Growth Rate)
- Substituting values gives: 17,950.90 x (1 + 0.08)
- This results in an expected profit of approximately $19,386.97.
Step 3: Verify the Result
After calculating the expected profit, always verify to ensure accuracy. This includes checking your initial income values and calculations for any possible errors.
- Confirm the values used in the growth calculation were correct.
- Re-calculate the expected income to ensure it equals $19,386.97.
- Cross-check with resources or tools for additional verification.