1. A metropolitan utility company in a western city of the United States expects

Question

1. A metropolitan utility company in a western city of the United States expects the consumption of electricity to increase by 4%/year during the next decade, due mainly to the expected population increase. If consumption does increase at this rate, find the amount by which the utility company will have to increase its generating capacity in order to meet the area's needs at the end of the decade. (percentage answer)

2. Online retail sales stood at $22 billion for 2000. For the next 2 years, they grew by 33.2% and 27.8% per year, respectively. For the next 6 years, online retail sales grew at the rate of approximately 30.5%, 19.9%, 24.3%, 14.0%, 18.7%, and 10.0% per year, respectively. What were the online sales for 2008?

Explanation / Answer

1. Yearly increase = 4% = 0.04

Let C be current consumption. Then consumption (C) after t years is:

C(t) = C * (1 + 0.04)^t

C(t) = C * (1.04)^t

After 10 years, consumption will be:

C(10) = C*(1.04)^10

C(10) = 1.48024428492 C

Total percentage increase after 10 years:

(1.48024428492 C - C) / C = 0.48024428492 C / C = 0.48024428492= 48.0244%

Utility company will have to increase generating capacity by 48.0244%

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