Consider a company's profits for the years 2001, 2002, and 2003. The profit was $10,000 in 2000, increased to $12,000 in 2001, further increased to $15,000 in 2002, and then decreased to $12,000 in 2003. Compute the percentage increase, and subsequently, find the average increase rate for this company over the three consecutive years.

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noord11991 noord11991 · Answer 1 · 2024-06-21T17:31:32-04:00

Answer:

Step-by-step explanation:

Percentage Increase from 2000 to 2001:

Profit in 2000: $10,000

Profit in 2001: $12,000

Percentage increase:

((Profit in 2001−Profit in 2000) / Profit in 2000) ×100% =

((10000−12000) / 10000) ×100% =20%

Percentage Increase from 2001 to 2002:

Profit in 2001: $12,000

Profit in 2002: $15,000

((Profit in 2002−Profit in 2001) / Profit in 2001) ×100% =

((15000−12000) / 12000) ×100% =25%

Percentage Decrease from 2002 to 2003:

Profit in 2002: $15,000

Profit in 2003: $12,000

Percentage decrease:

((Profit in 2003−Profit in 2002) / Profit in 2002) ×100% =

((12000−15000) / 15000) ×100% =-20%

Average Increase Rate:

To find the average increase rate over the three years, sum the percentage changes and divide by 3

{((20%+25%) - 20% )/ 3} = 83.3%

Therefore, the average increase rate for this company’s profits over the three consecutive years is approximately 8.33%