Last year Dania Corporation's sales were $525 million.If sales grow at 9.5% per year,how large (in millions)will they be 8 years later?

Question

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The correct answer is B.The formula for compound interest is:A = P(1 + r/n)^(nt)where:A is the future valueP is the present valuer is the annual interest raten is the number of times per year that the interest is compoundedt is the number of yearsIn this case, we have:P = $525 millionr = 9.5% = 0.095n = 1 (since the interest is compounded annually)t = 8Plugging these values into the formula, we get:A = $525 million(1 + 0.095/1)^(1*8)A = $525 million(1.095)^8A = $1,085.11 millionTherefore, the sales will be $1,085.11 million 8 years later.

Last Year Dania Corporation's Sales Were $525 Million