A small business predicts sales according to a straight line method. if sales were$110000 in the first year and $2000000 in the fourth year find the rate of growth in sales per year .......text book answer is $30,000 per year
To find the rate of growth in sales per year, we need to calculate the difference in sales between the first and fourth years and divide it by the number of years between them.
Sales in the first year = $110,000
Sales in the fourth year = $200,000
Difference in sales = Sales in the fourth year - Sales in the first year
= $200,000 - $110,000
= $90,000
Number of years between the first and fourth year = 4 - 1 = 3
Rate of growth in sales per year = Difference in sales / Number of years
= $90,000 / 3
= $30,000 per year
Therefore, the rate of growth in sales per year is $30,000 according to the textbook answer.