In a company's first year in operation, it made an annual profit of $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 calculate the profit for each year and then sum them up.
First, we calculate the profit for each year using the formula:
Profit = Initial Profit * (1 + Growth Rate)^Year
where
Initial Profit = $204,000
Growth Rate = 18% = 0.18
Year = year number
So the profit for each year would be:
Year 1: $204,000
Year 2: $204,000 * (1 + 0.18) = $240,720
Year 3: $240,720 * (1 + 0.18) = $284,966.4
Continuing this calculation, we find the profit for each year up to Year 24.
Finally, we sum up all the profits from Year 1 to Year 24:
Total Profit = Profit Year 1 + Profit Year 2 + ... + Profit Year 24
Calculating this sum will give us the total profit the company would make over the course of its first 24 years of operation.