Your finance text book sold 45,500 copies in its first year. The publishing company expects the sales to grow at a rate of 20.0 percent for the next three years, and by 7.0 percent in the fourth year. Calculate the total number of copies that the publisher expects to sell in year 3 and 4. (If you solve this problem with algebra round intermediate calculations to 6 decimal places, in all cases round your final answers to the nearest whole number.)
To calculate the total number of copies the publishing company expects to sell in year 3 and 4, we will first find the number of copies sold in year 2, then year 3, and finally year 4.
Step 1: Calculate the number of copies sold in year 2.
To find the number of copies sold in year 2, we need to increase the initial sales by 20.0%.
Sales in year 2 = Initial sales + (Initial sales * Growth rate)
Sales in year 2 = 45,500 + (45,500 * 0.20)
Sales in year 2 = 45,500 + 9,100
Sales in year 2 = 54,600
Step 2: Calculate the number of copies sold in year 3.
To find the number of copies sold in year 3, we need to increase the sales in year 2 by 20.0%.
Sales in year 3 = Sales in year 2 + (Sales in year 2 * Growth rate)
Sales in year 3 = 54,600 + (54,600 * 0.20)
Sales in year 3 = 54,600 + 10,920
Sales in year 3 = 65,520
Step 3: Calculate the number of copies sold in year 4.
To find the number of copies sold in year 4, we need to increase the sales in year 3 by 7.0%.
Sales in year 4 = Sales in year 3 + (Sales in year 3 * Growth rate)
Sales in year 4 = 65,520 + (65,520 * 0.07)
Sales in year 4 = 65,520 + 4,587.6 (rounded to 6 decimal places)
Sales in year 4 = 70,107.6 (rounded to the nearest whole number)
Sales in year 4 = 70,108
Therefore, the publishing company expects to sell approximately 65,520 copies in year 3 and approximately 70,108 copies in year 4.