Shalit Corporation's 2008 sales were $12 million. Its 2003 sales were $6 million. a. At what rate have sales been growing? b. Suppose someone made this statement: "Sales doubled in 5 years. This represents a growth of 100% in 5 years; so dividing 100% by 5, we find the growth rate to be 20% per year." Is that statement correct?

Question

Martha

Business

1 February, 19:08

Shalit Corporation's 2008 sales were $12 million. Its 2003 sales were $6 million. a. At what rate have sales been growing? b. Suppose someone made this statement: "Sales doubled in 5 years. This represents a growth of 100% in 5 years; so dividing 100% by 5, we find the growth rate to be 20% per year." Is that statement correct?

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Krista Hobbs · Answer 1

(12-6) / 12 gives you the growth rate * over five years * (115%)

divide that by 5 and you get an average rate of 23% growth per year.

If we're rounding, yes, that statement is correct. Otherwise, growth over five years doubled because there was a growth of 115% and year-over-year growth was 23%.