Revenue Growth of a Home Business: Problem #1: \"Maxwell started a home theater

Question

Revenue Growth of a Home Business: Problem #1: "Maxwell started a home theater business in 2005. The revenue of his company for that year was $240,000. Therevenue grew by 20% in 2006 and by 30% in 2007. Maxwellprojected that the revenue growth for his company in the next 3 yrwill be at least 25%/year. how much does maxwell expect his minimumrevenue to be for 2010?"
Problem #2: "The inflation rates in the U.S. economy for2003 through 2006 are 1.6%, 2.3%, 2.7%, and 3.4%, respectively. What was the purchasing power of a dollar at the beginning of2007 compared to that at the beginning of 2003? Problem #1: "Maxwell started a home theater business in 2005. The revenue of his company for that year was $240,000. Therevenue grew by 20% in 2006 and by 30% in 2007. Maxwellprojected that the revenue growth for his company in the next 3 yrwill be at least 25%/year. how much does maxwell expect his minimumrevenue to be for 2010?"
Problem #2: "The inflation rates in the U.S. economy for2003 through 2006 are 1.6%, 2.3%, 2.7%, and 3.4%, respectively. What was the purchasing power of a dollar at the beginning of2007 compared to that at the beginning of 2003?

Explanation / Answer

1. should go like this: 240,000 x 0.2 = ? + 240,000 = revenue for 2006 2006 rev. x 0.3 = ? + 2006 rev. = rev. for 2007 2007 rev. x 0.25 =? + 2007 rev.= rev. for 2008 and so on till 2010, and you should get $877,500 in revenue in2010. 2. to start off just pick a dollar value to start with for this problem i chose $2 so just start compound it by the inflation rates and whatever you get multiply that number by the next rate andso on, etc. and you should end up with 10% hike in 2007 from 2003

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