The profit in a company is $3 million. Set up two functions that indicate the profit y $ after x years if the profit is expected to increase by 10% each year and decrease by 5% each year.
To set up the functions that indicate the profit after x years, we need to consider the expected increase and decrease rates.
If the profit is expected to increase by 10% each year, we can use the formula for compound interest:
Function for increasing profit: y = 3 million * (1 + 0.10)^x
Where:
- y represents the profit after x years.
- 3 million is the initial profit.
- 0.10 represents the 10% increase rate.
- x is the number of years.
Now, if the profit is expected to decrease by 5% each year, we can use the formula for compound depreciation:
Function for decreasing profit: y = 3 million * (1 - 0.05)^x
Where:
- y represents the profit after x years.
- 3 million is the initial profit.
- 0.05 represents the 5% decrease rate.
- x is the number of years.
Using these two functions, you can calculate the profit after a specific number of years based on increasing or decreasing the profit.