Question

If the Unique Glass Company's sales in 1995 were $24 million and increased by 15% annually, what will be the sales in the year 2003?

a) $32.4 million
b) $42.6 million
c) $45.36 million
d) $36.8 million

Answer 1

The Unique Glass Company's sales will be $45.36 million in 2003 after compounding a 15% annual increase from $24 million in 1995 over 8 years.

The correct option is C.

Step-by-step explanation:

The question asks us to determine the sales of the Unique Glass Company in the year 2003 if their sales were $24 million in 1995 and they increased by 15% annually. To find the sales in 2003, we need to calculate the compound growth over the 8 years (from 1995 to 2003).

First, let's identify the compound growth formula:

Sales = Initial Sales × (1 + Annual Growth Rate)Number of Years

Now we can plug in the values:

Sales in 2003 = $24 million × (1 + 0.15)8

Next, calculate the growth factor (1 + 0.15)8 and multiply it by $24 million to find the sales in 2003.

By doing the calculation, the sales in 2003 are found to be $45.36 million.

Therefore, the correct answer is c) $45.36 million.

The correct option is C.