Your finance text book sold 49,500 copies in its first year. The publishing company expects the sales to grow at a rate of 23.0 percent for the next three years, and by 9.0 percent in the fourth year. Calculate the total number of copies that the publisher expects to sell in year 3 and 4.
To calculate the total number of copies that the publisher expects to sell in year 3 and 4, we need to use the growth rate percentages provided.
First, let's calculate the sales in year 2. We'll use the formula:
Sales in Year 2 = Sales in Year 1 + (Growth Rate in Year 1 * Sales in Year 1)
Given that the sales in Year 1 were 49,500 copies and the growth rate in Year 1 is 23.0%, we can calculate the sales in Year 2:
Sales in Year 2 = 49,500 + (0.23 * 49,500) = 49,500 + 11,385 = 60,885 copies
Next, let's calculate the sales in Year 3. We'll use the same formula:
Sales in Year 3 = Sales in Year 2 + (Growth Rate in Year 2 * Sales in Year 2)
Given that the sales in Year 2 were 60,885 copies and the growth rate in Year 2 is also 23.0%, we can calculate the sales in Year 3:
Sales in Year 3 = 60,885 + (0.23 * 60,885) = 60,885 + 14,019.55 = 74,904.55 copies
Now, let's calculate the sales in Year 4. We'll use the formula:
Sales in Year 4 = Sales in Year 3 + (Growth Rate in Year 3 * Sales in Year 3)
Given that the sales in Year 3 were 74,904.55 copies and the growth rate in Year 3 is 9.0%, we can calculate the sales in Year 4:
Sales in Year 4 = 74,904.55 + (0.09 * 74,904.55) = 74,904.55 + 6,741.41 = 81,645.96 copies
Therefore, the publisher expects to sell approximately 74,905 copies in Year 3 and 81,646 copies in Year 4.