Question

Joshua currently earns $5000 a year from his lawn care business. He has two plans to increase his revenue.

Plan 1 would increase his yearly revenue by 20%.
Plan 2 would increase his revenue by $1500 a year.

Which plan predicts a greater revenue 7 years from now

Answer 1

Plan 1 A=5,000×(1+0.20)^(7)=17,915.9 Plan 2 A=(1,500×7)+5,000=15,500 How much greater 17,915.9−15,500=2,415.9

Answer 2

Plan 2 will predicts a greater revenue.

Explanation:

If Joshua implement Plan 1 his Revenue will increase:

(5000 × 20 × 7) ÷ 100 = 7000

Thus, this plan increase his revenue by 7,000.

and if He implement Plan 2 his revenue will be calculate by formula:

Increase = a + (n - 1) × d

Here, n = 7, a = 5000, d = 1500

⇒ Increase = 5000 + (7 - 1) × 1500

⇒ Increase = 5,000 + 6 × 1500

⇒ Increase = 5,000 + 9,000

⇒ Increase = 14,000

Thus, this plan increase his revenue by 14,000.

Hence, Plan 2 will predicts a greater revenue.