Question

Sawyer Corporation's 2017 sales were $7 million. Its 2012 sales were $3.5 million. At what rate have sales been growing? Round your answer to two decimal places. % 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 the statement correct?

Answer 1

The growth rate in sales between 2012 and 2017 is calculated as follows

Growth rate = ( $ 7 million - $ 3.5 million ) $\div$ $ 3.5 million

Growth rate = 100%

The statement that " Sales doubled in 5 years " is a correct statement because in 5 years, the sales has doubled.

The annual growth of sales = 100% $\div$ 5

Annual growth in sales = 20%

Thus the growth rate per year = 20%