In a company's first year in operation, it made an annual profit of dollar sign, 204, comma, 000$204,000. The profit of the company increased at a constant 18% per year each year. How much total profit would the company make over the course of its first 24 years of operation, to the nearest whole number?
To calculate the total profit the company would make over the course of its first 24 years of operation, we need to use the formula for calculating compound interest:
A = P(1 + r)^n
Where:
A = Total profit after n years
P = Initial profit = $204,000
r = Annual increase rate = 18% = 0.18
n = Number of years
First, let's calculate the profit after 24 years:
A = $204,000(1 + 0.18)^24
A = $204,000(1.18)^24
A = $204,000(64.350366)
A = $13,123,549.784
Therefore, the total profit the company would make over the course of its first 24 years of operation is approximately $13,123,550.