Question

A small engine repair company's total revenue this year is 1.2 times last year's revenue.

If the company has the same growth every year, which equation describes how many years it will take for the company to at least double its revenue?


(A) y/1.2 ≥ 2


(B) 1.2/y ≥ 2


(C) 1.2y ≥ 2


(D) 1.2^y ≥ 2


Given that the company has the same growth every year, how many years (to the nearest whole year) will it take for the company to at least double its revenue?

A) 1

B) 2

C) 3

D) 4

Answer 1

1. (D) 1.2^y ≥ 2
2. (D) 4

Explanation:

The revenue is multiplied by 1.2 each year, so after y years, it is multiplied by 1.2 y times, or 1.2^y. The appropriate choice of equation is ...

1.2^y ≥ 2

__

Taking logarithms, we get ...

y·log(1.2) ≥ log(2)

y ≥ log(2)/log(1.2)

y ≥ 3.80

It will take 4 years to at least double the company's revenue.