the company eve works for is seeing a 25% growth in profits every year. if the company makes $363,200 this…

the company eve works for is seeing a 25% growth in profits every year. if the company makes $363,200 this year, what will the annual profits be in 3 years? if necessary, round your answer to the nearest cent.

the company eve works for is seeing a 25% growth in profits every year. if the company makes $363,200 this year, what will the annual profits be in 3 years? if necessary, round your answer to the nearest cent.

Answer

Explanation:

Step1: Identify the growth - formula

The formula for compound growth is $A = P(1 + r)^n$, where $P$ is the initial amount, $r$ is the growth rate as a decimal, and $n$ is the number of years.

Step2: Convert the percentage to a decimal

The growth rate $r=25% = 0.25$, the initial profit $P = 363200$, and the number of years $n = 3$.

Step3: Substitute the values into the formula

$A=363200\times(1 + 0.25)^3$. First, calculate $(1 + 0.25)^3=(1.25)^3=1.25\times1.25\times1.25 = 1.953125$. Then, $A = 363200\times1.953125$. $A=709375$.

Answer:

$709375.00$