For this question, I am looking for someone to please explain how to solve this:

Question

For this question, I am looking for someone to please explain how to solve this: I am looking for really helpful explanations if anyone can help me understand it better.

(#5-2)  Jimbob's store assumes sales will increase 6 percent p/yr over next two years (@ constant rate). His sales currently are $80,00. What will be the forecast for his sales for each of the next 2 years?
B) If 1999 sales were $40,000 and became $80,000 by 2003 (4 yrs), can you tell me actual annual compound growth rate (and how to find this)?

Explanation / Answer

Solution A: Find below the forcast of sales at the end of each year considering the current sales at 80,000.

Years

Solution B: The sales has gone up by 40,000 (80000-40000) that means the overall growth raet is 100% of sales in 1999. If we share the 100% growth rate of 100% in 4 year, the average grown rate is 25% each year.

However the couponud groth can be stated as per the below table:

Years

Sales Growth Sales increase Total Sales 1 year 80000 6% 4800 84800 2 year 84800 6% 5088 89888

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