The follwing table shows total collections from User Fees for the city of Taxylv

Question

The follwing table shows total collections from User Fees for the city of Taxylvania for the last 7 years.   Use this data to forecast total user fee revenue for each of the next three years (2016 - 2018).

Year               Total User Charges

2009                      481,984

2010                    494,149

2011                      511,218

2012                    530,184

2013                  531,157

2014                    541,850

2015                550,000

2016                        ???

2017                        ???

2018                        ???

What is the estimate for 2017 user fee revenues? _______________

Explanation / Answer

Compound Growth Rate = (550000/481984)^(1/7) -1 = 1.90%

Estimate for 2017 user fee revenues = 550000*(1+1.90%)^2

Estimate for 2017 user fee revenues = $ 571,098.55

Estimate for 2017 user fee revenues = $ 571,099 (approx)

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