Final answer:
The total revenue of the Italian restaurant over the three years is calculated by taking the first year's revenue and adding the increased revenue for the second and third years, based on the respective 3% and 5% growth rates. This results in a total revenue of $809,190.
Step-by-step explanation:
To calculate the total revenue of the Italian restaurant over all three years, we need to account for the revenue changes each year due to the percentage increases.
The first-year revenue is given as $260,000. In the second year, the revenue increased by 3%. To find this increase, we multiply the first year's revenue by 3% (0.03):
$260,000 × 0.03 = $7,800.
Add this increase to the first year's revenue to get the second year's revenue:
$260,000 + $7,800 = $267,800.
In the third year, the revenue increased by 5% from the second year. Calculate 5% of the second year's revenue:
$267,800 × 0.05 = $13,390.
Add this increase to the second year's revenue to find the third year's revenue:
$267,800 + $13,390 = $281,190.
To find the total revenue over all three years, we add the annual revenues together:
$260,000 (first year) + $267,800 (second year) + $281,190 (third year) = $809,190.
Therefore, the total revenue of the Italian restaurant over the three years is $809,190.