Question

Helpppp!

In the year 2004, a company made $4.4 million in profit. For each consecutive year after that, their profit increased by 14%. How much would the company's profit be in the year 2006, to the nearest tenth of a million dollars?

Answer 1

The answer for you question is $5.7 million

Step by Step

First we find 14% of 4.4 million which is
= 616,000
Then we add that to 4.4 million
=5016,000
Then we take 14% of 5016,000 which is
=702,240
Then we add them together to get 5,718,240 which if we round we get $5.7

Answer 2

$5.7 million

Explanation:

To calculate the company's profit, we can use the Annual Compound Interest formula:

`\boxed{\begin{minipage}{7 cm}\underline{Annual Compound Interest Formula}\\\\$ A=P\left(1+r\right)^(t)$\\\\where:\\\\ \phantom{ww}$\bullet$ $A =$ final amount \\ \phantom{ww}$\bullet$ $P =$ principal amount \\ \phantom{ww}$\bullet$ $r =$ interest rate (in decimal form) \\ \phantom{ww}$\bullet$ $t =$ time (in years) \\ \end{minipage}}`

The principal amount, P, is the amount of profit the company made in the year 2004:

• P = $4.4 million

The interest rate, r, is the percentage that the company's profit increased by each year:

• r = 14% = 0.14

The time is the number of years after 2004.

• t = 2006 - 2004 = 2

Substitute these values into the annual compound interest formula and solve for A:

`A=4.4(1+0.14)^2`

`A=4.4(1.14)^2`

`A=4.4(1.2996)`

`A=5.71824`

`A=5.7\; \sf (nearest\;tenth)`

Therefore, the company's profit in the year 2006, to the nearest tenth of a million dollars, is $5.7 million.