Question

in the year 2003, a company made $6.5 million in profit. for each consecutive year after that, their profit increased by 8%. how much would the companys profit be in the year 2007, to the nearest tenth of a million dollars?

Explanation:

Step1: Identify growth parameters

Initial profit $P_0 = 6.5$ million, growth rate $r = 0.08$, time $t = 2007-2003=4$ years.

Step2: Use compound growth formula

Formula: $P = P_0(1+r)^t$
Substitute values: $P = 6.5\times(1+0.08)^4$

Step3: Calculate $(1.08)^4$

$(1.08)^4 = 1.08\times1.08\times1.08\times1.08 = 1.36048896$

Step4: Compute final profit

$P = 6.5\times1.36048896 = 8.84317824$

Step5: Round to nearest tenth

Round $8.84317824$ to 1 decimal place: $8.8$

Answer:

8.8 million dollars