If ABC company's sales in U.S. are growing at a rate of 12% annually, how long...

If ABC company's sales in U.S. are growing at a rate of 12% annually, how long will it take sales to triple?
a) 7.25 yrs
b) 8.23 yrs
c) 10.52 yrs

d) 9.69 yrs
e) 7.64 yrs

Expert Solution

We use the formula:
A=P(1+r/100)^n
where
A=future value($3x)
P=present value($x say)
r=rate of interest
n=time period.

3x=x*(1.12)^n

3=(1.12)^n

Taking log on both sides;

log 3=n*log (1.12)

n=log 3/log(1.12)

=9.69 years(Approx)

jeff jeffy answered 2 years ago

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