Suppose someone made this statement: "Sales doubled in 5 years. This represents a growth of 100% in 5 years, so, dividing 100% by 5, we find the growth rate to be 20% per year." Is the statement correct?

Question

Business

Mara Kline

3 December, 03:43

Suppose someone made this statement: "Sales doubled in 5 years. This represents a growth of 100% in 5 years, so, dividing 100% by 5, we find the growth rate to be 20% per year." Is the statement correct?

+2

Answers (1)

Know the Answer?

Iris Haley · Answer 1

No, the statement isn't correct

Explanation:

The statement is not correct because in any moment they say the growth was constant so asuming that each year the growth was of 20% is not correct. Also because usually when a company is growing and is increasing its sales it makes it in a progresive way so the first years sales are usually less than the ones of the fifth year.