Question

The projected worth (in millions of dollars) of a large company is modeled by the equation w = 266(1.05) t. The variable t represents the number of years since 2000. What is the projected annual percent of growth, and what should the company be worth in 2010?

Answer 1

The yearly growth percentage is 5%

The worth of the company in 2010 is 433 million of dollars approximately

Explanation:

The annual growth percentage;

We can write the equation of w as follows;

W = 266 (1 + 0.05)^t

Compare this with ;

W = I(1 + r)^t

Where W is the worth at a particular year

I is the initial worth at year 2000

r is the rate of increase per year

and t is the time since 2010

where it is the 0.05 that represents the yearly growth percentage (r)

0.05 as a percentage is 5/100 which is 5%

Now, we want to calculate the worth of the company in the year 2010

The first thing to do here is to calculate the value of t.

The value of t is the difference between the years 2000 and 2010 and that is 2010-2000 = 10 years

Now to find the worth at 2010, simply substitute that value of t = 10 in the equation

Thus;

W = 266(1.05)^10

W = 433.2859707228

Which is approximately 433