I have no idea how to solve these 2 problems... Any help would begreatly appreci

Question

I have no idea how to solve these 2 problems... Any help would begreatly appreciated

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 for 2003through 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) Year that he started (in other words, year zero) =$240,000 In 2006, the revenue grew by 20%. Multiply the initial amountby .2 and add it to the initial amount. 240,000+.2(240000)=288000 In 2007, the revenue grew by 30%. Here, the initial amount is288000. Repeat the previous step. 288000+.2(288000)=345600 For 2008-2010, repeat previous steps 25% 2008: 345600+.2(345600)=414720 2009: 414720+.2(414720)=497664 2010: 497664+.2(497664)=597196.8 Answer: $597,196.80 2) Say that the purchasing power of a dollar was 100. In 2003, it inflated 1.6%. 100+100(.016)=101.6 2004: 101.6+101.6(.023)=___ And so on.

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