Locil Agencies is a fast-growing advertising agency. Currently, its sales is at $700,000. The company expects its sales to grow at an annual rate of 35 percent in the next two years, followed by an annual rate of 25 percent in years 3 through 7. Finally, its growth rate would slow down to 10 percent in years 8-10. What will be its sales as of year 10? (Round to the nearest dollar.)

Question

Quizplus · Accepted Answer

To find the sales in year 10, calculate the sales for each period using the given growth rates:  Year 1-2: $700,000 * (1.35)^2  Year 3-7: Result from Year 2 * (1.25)^5  Year 8-10: Result from Year 7 * (1.10)^3  The final result is approximately $5,181,956.

Locil Agencies Is a Fast-Growing Advertising Agency