Question

Cochrane Associate's net sales last year were $525 million. If sales grow at 7.5% per year, how large (in millions) will they be 8 years later?

Answer 1

Answer:

$936.33

Explanation:

We know that

Future value = Present value × (1 + rate)^number of years

where,

Net sales last year = Present value = $525 million

Rate = 7.5%

Number of years =8 years

So, the future value

= $525 million × (1 + 7.5%)^8

= $2,750 × 1.7834778256

= $936.33

We simply applied the above formula so that the future value could come