# revenue growth help

• Apr 23rd 2007, 08:41 PM
superpieboy
revenue growth help
hi everyone, i need some serious help with this question!

i am in the middle of studying for a manager position offered by my employers
and need to take this manager lap test, i have been looking at this one question all day, now i have 18 questions and 20 minutes to do them without calculator, please help solve if u can

Q: revenue is expected to increase steadily at 15% annually, if revenue at the end of 2000 was 2.3 million what should the approximate revenue be at the end of 2004.

i answered the question but it took me 10 minutes, this will not work i need to be able to do this quickly

• Apr 24th 2007, 02:14 AM
CaptainBlack
Quote:

Originally Posted by superpieboy
hi everyone, i need some serious help with this question!

i am in the middle of studying for a manager position offered by my employers
and need to take this manager lap test, i have been looking at this one question all day, now i have 18 questions and 20 minutes to do them without calculator, please help solve if u can

Q: revenue is expected to increase steadily at 15% annually, if revenue at the end of 2000 was 2.3 million what should the approximate revenue be at the end of 2004.

i answered the question but it took me 10 minutes, this will not work i need to be able to do this quickly

After 4 years at 15% growth is R=2.3 (1.15)^4 the first approximation to
this is R~= 2.3 (1 + 4*0.15) ~= 3.7 million.

A more accurate estimate will take about as long as calculating this exactly.

RonL
• Apr 24th 2007, 06:09 AM
superpieboy
revenue
thanks cap'n blk

the answere is 4.02 on the test!!!!
great job

i will have to use that long way that u stated, also what could i look up on the internet for info or help on question like this?

what is the formula for getting the 4.02 million?

thx
jeff
• Apr 24th 2007, 07:12 AM
ecMathGeek
Quote:

Originally Posted by superpieboy
thanks cap'n blk

the answere is 4.02 on the test!!!!
great job

i will have to use that long way that u stated, also what could i look up on the internet for info or help on question like this?

what is the formula for getting the 4.02 million?

thx
jeff

CaptainBlack used what is often refered to as the "compounding interest" formula.

A = P(1 + r/n)^(nt)

Where
P = the principle amount of money (the initial amount of money): 2.3 mil
A = the amount of money earned: 4.02 mil
r = the interest rate: 15% or .15
n = the number of times the money is compounded in one year: 1
t = the number of years the money is compounded: 4

In your case, you may not need the equation with "n"s in it. You can simply use:

A = P(1 + r)^t

Just remember to write r in decimal form.
• Apr 24th 2007, 03:43 PM
superpieboy
revenue
2,30
x 1.15
-----------------
1150
230
230
----------------
2,645,000
2,300,000
----------------
4,945,000

how does this look?