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27 March, 11:46

A company has revenue of $1000 in 2009. our current estimate is that revenues will grow 25% per year. our profit each year will equal 20% of revenue. what is the total value (rounded to the nearest dollar) of all revenues earned during the years 2009-2015?

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  1. 27 March, 13:17
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    Year 2009:

    Revenue = $1000

    Profit = 1000 (20%) = $200

    Year 2010:

    Revenue = 1000 (1.25) ^1 = $1250

    Profit = 1250 (20%) = $250

    Year 2011:

    Revenue = 1000 (1.25) ^2 = $1562.5

    Profit = 1562.5 (20%) = $312.5

    Year 2013:

    Revenue = 1000 (1.25) ^3 = $1953.125

    Profit = 1953.125 (20%) = $390.625

    Year 2014:

    Revenue = 1000 (1.25) ^4 = $2441.41

    Profit = 2441.41 (20%) = $488.28

    Year 2015:

    Revenue = 1000 (1.25) ^5 = $3051.76

    Profit = 3051.76 (20%) = $610.35

    The total revenue would be $11,259
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