Your company currently has sales of $200,000, but you expect to have $500,000 in sales in 5 years. What rate do you expect sales to grow by each year?

Question

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Business

22 April, 06:50

Your company currently has sales of $200,000, but you expect to have $500,000 in sales in 5 years. What rate do you expect sales to grow by each year?

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Answers (1)

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Valery Chang · Answer 1

The sales will grow at the rate of 20.11% each year.

Explanation:

This problem requires us to calculate the growth rate of sales. The growth can easily be calculated using following formula.

Growth = (Future Value/Current value) ^ (1/n) - 1

Growth = (500,000/200,000) ^ (1/5) - 1

Growth = 20.11 %