Answered

In the year 2010, a company made $7.1 million in profit. For each consecutive year after that, their profit increased by 9%. How much would the company's profit be in the year 2012, to the nearest tenth of a million dollars?



Answer :

NooblyBaconYT

Answer:

$8.4 Million

Step-by-step explanation:
1. Identify Formula

The financial formula for this problem is the one for Compound Interest, which is
X=X0(1+r)^n
Where X is the future value (profit in 2012)
X0 is the current value (profit in 2010)
R is the rate of increase (9%)
N is the number of years (2)
2. Replace variables and solve
We are trying to solve for X. Luckily, the formula has already isolated X.
Subbing in the values, we get
X=7.1*(1+0.09)^2
X=8.4 (rounded)
3. Answer
So the future profit in 2012 would be around $8.4 million.

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