Question

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.

Explanation:

Step1: Identify growth formula

We use the compound growth formula: $A = P(1 + r)^t$, where $P$ = initial profit, $r$ = annual growth rate, $t$ = time in years, $A$ = future profit.

Step2: Plug in given values

$P = 363200$, $r = 0.25$, $t = 3$
$A = 363200(1 + 0.25)^3$

Step3: Calculate growth factor

First compute $(1.25)^3 = 1.25 \times 1.25 \times 1.25 = 1.953125$

Step4: Compute final profit

$A = 363200 \times 1.953125$
$A = 709375.00$

Answer:

$\$709,375.00$