Question

in the year 2007, a company made $6.6 million in profit. for each consecutive year after that, their profit increased by 13%. how much would the company’s profit be in the year 2010, to the nearest tenth of a million dollars?

Explanation:

Step1: Identify growth rate & years

Growth rate $r=13\%=0.13$, years passed $n=2010-2007=3$
Initial profit $P_0=\$6.6$ million

Step2: Apply compound growth formula

Compound growth formula: $P = P_0(1+r)^n$
Substitute values: $P = 6.6\times(1+0.13)^3$

Step3: Calculate $(1.13)^3$

$(1.13)^3=1.13\times1.13\times1.13=1.442897$

Step4: Compute final profit

$P=6.6\times1.442897\approx9.5231202$

Step5: Round to nearest tenth

Round $9.5231202$ to 1 decimal place: $9.5$

Answer:

$\$9.5$ million