Question

A new CEO promises to increase company sales by 7% per year from its current level of $5,435,678 to a target level of $8 million. How long would it take for the new CEO to reach this goal?

Answer 1

It will take 5 years and 259 days.

Step-by-step explanation:

Giving the following information:

A new CEO promises to increase company sales by 7% per year from its current level of $5,435,678 to a target level of $8 million.

We need to use the following variation of the final value formula:

FV= PV*(1+i)^n

Isolating n:

n=[ln(FV/PV)]/ln(1+r)

PV= 5,435,678

FV= 8,000,000

i= 0.07

n= ln(8,000,000/5,435,678) / ln(1.07)

n= 5.71

To be more accurate:

0.71*365= 259

It will take 5 years and 259 days.