Question

7.

A company is able to sell 600 of its product in the first year of business.
products it is able to sll decreases by 20%. If this trend continues:
Each year however, the amount of
a) How many products will it be able to sell in year 5?
b) How many products will it have sold over the course of 5 years?

Answer 1

9514 1404 393

Answer:

• 246 products in year 5
• 2017 products over 5 years

Explanation:

The n-th term of the geometric series is ...

an = a1(r^(n-1))

for first term a1 and common ratio r. The common ratio here is the growth factor: 1 -20% = 0.8. This means the 5th term (5th year sales) will be ...

a5 = 600(0.8^(5-1)) ≈ 246 . . . . . products sold in year 5

The sum is given by ...

sn = a1(1 -r^n)/(1 -r) = 600(1 -0.8^5)/(1-0.8) = 2017

The company will have sold about 2017 products over 5 years.