Question

Sylvia owns a bookstore called The Happy Cat, currently valued at $175, 000. Determine the value of the business in 3 years if

Sylvia predicts 13% growth.

$285, 332.88
$252,506.98
$268,418.60
$223,457.50

Answer 1

To calculate the value of the business in 3 years, we use the formula for compound interest:

A = P * (1 + r/100)^(t)

where A is the final amount, P is the initial amount, r is the annual interest rate as a decimal, t is the number of years.

A = $175,000 * (1 + 0.13/1)^(1*3) = $268,418.60

Therefore, the value of the business in 3 years is $268,418.60. Option C is the correct answer.