Question

In the year 2003, a company made $6.3 million in profit. For each

consecutive year after that, their profit increased by 15%. How much would
the company's profit be in the year 2006, to the nearest tenth of a million
dollars?

Answer 1

Explanation:

15/100 x 6.3 = 0.945

6.3 + 0.945 = $7.245 or $7.25

Answer 2

$9.6 million

Explanation:

To find the profit of the company in the year 2006, we need to apply a 15% increase to the profits from 2003, for three consecutive years.

In the first year after 2003, the company's profit would be:

$6.3 million + 15% of $6.3 million

= $6.3 million + $0.945 million

= $7.245 million

In the second year after 2003, the company's profit would be:

$7.245 million + 15% of $7.245 million

= $7.245 million + $1.08675 million

= $8.33175 million

In the third year after 2003, the company's profit would be:

$8.33175 million + 15% of $8.33175 million

= $8.33175 million + $1.24976 million

= $9.58151 million

Rounding to the nearest tenth of a million dollars, we get:

$9.6 million

Therefore, the company's profit in the year 2006 would be approximately $9.6 million.

You can also do it the formula way:

To find the profit in 2006, we need to calculate the profit for each year starting from 2003 and increasing by 15% each year. We can do this using the formula:

Profit = (1 + r)^n * P

where r is the annual growth rate (15% or 0.15), n is the number of years since 2003 (for 2006, n = 3), and P is the initial profit in 2003 ($6.3 million).

Plugging in the values, we get:

Profit = (1 + 0.15)^3 * $6.3 million

Profit = 1.15^3 * $6.3 million

Profit = 1.521 * $6.3 million

Profit = $9.583 million

Rounding to the nearest tenth of a million dollars, the company's profit in 2006 would be:

Profit = $9.6 million

Therefore, the company's profit in 2006 would be $9.6 million to the nearest tenth of a million dollars.