Question

A company made $20,000 in revenue in oneyear. The president of the company determinedthat the company's revenue needs to increaseby 10% each year to be successful. If t representsthe number ofyears that have passed and R(t)represents the yearly revenue goal, whichexpression could the president of the companyuse to determine the revenue goal for any year?

Answer 1

A company made $20,000 in revenue in one year. The growth will be 10% per year.

We can find the revenue R(t) for year t as:

$\begin{gathered} R(0)=20000 \\ R(1)=R(0)+\frac{10}{100}R(0)=1.1R(0)=20000\cdot1.1 \\ R(2)=1.1\cdot R(1)=1.1\cdot1.1\cdot R(0)=1.1^2R(0) \\ R(t)=1.1^t\cdot R(0)=20000\cdot1.1^t \end{gathered}$

Answer: R(t) = 20000*1.10^t [option B]