A company's revenue increased by 10% in the first year, decreased by 5% in the second year, and increased by 15% in the third year. If the initial revenue was $500,000, what is the final revenue after three years?*1 pointa) $548,250b) $556,500c) $562,500d) $578,250
Question
A company's revenue increased by 10% in the first year, decreased by 5% in the second year, and increased by 15% in the third year. If the initial revenue was 548,250b) 562,500d) $578,250
Solution
To solve this problem, we need to apply the percentage changes year by year to the initial revenue.
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In the first year, the revenue increased by 10%. So, we calculate 10% of 50,000. Adding this to the initial revenue, we get $550,000.
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In the second year, the revenue decreased by 5%. So, we calculate 5% of 27,500. Subtracting this from the revenue at the end of the first year, we get $522,500.
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In the third year, the revenue increased by 15%. So, we calculate 15% of 78,375. Adding this to the revenue at the end of the second year, we get $600,875.
So, the final revenue after three years is $600,875. However, this option is not listed in the choices provided. There might be a mistake in the question or the options provided.
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