As compared to its first year of operation, ABC Company grew 8% in the second year and an additional 2% per year for the next two years. If total growth for years 2-4 was $45,000 over the first year’s sales of $150,000, how much did ABC Company grow in year 2
9000
To find out how much ABC Company grew in year 2, we first need to calculate the total growth in years 2-4. We are given that the total growth for years 2-4 was $45,000 over the first year's sales of $150,000.
Total growth in years 2-4 = $45,000
First-year sales = $150,000
Now, let's calculate the sales in year 4. We know that the sales in year 4 is the sales in year 3 increased by an additional 2%.
Let sales in year 3 = x
Sales in year 4 = x + 2% * x = x(1 + 0.02)
The total growth in years 2-4 is the sum of the growth in year 2 and the growth in year 3 and year 4.
Total growth in years 2-4 = (sales in year 2 - first-year sales) + (sales in year 4 - first-year sales)
$45,000 = (sales in year 2 - $150,000) + (x(1 + 0.02) - $150,000)
Now we can solve for x to find the sales in year 3:
$45,000 + $150,000 = sales in year 2 + x(1 + 0.02) - $150,000
$195,000 + $150,000 = sales in year 2 + x(1.02) - $150,000
$345,000 = sales in year 2 + x(1.02)
Substituting the given growth rate of 8% in year 2:
$345,000 = $150,000 + sales in year 2 * 1.08
$345,000 - $150,000 = sales in year 2 * 1.08
$195,000 = sales in year 2 * 1.08
Dividing both sides by 1.08:
sales in year 2 = $195,000 / 1.08
sales in year 2 ≈ $180,556.