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myrzilka [38]
3 years ago
11

Brockman Corporation's earnings per share were $3.50 last year, and its growth rate during the prior 5 years was 7.0% per year.

If that growth rate were maintained, how many years would it take for Brockman's EPS to triple?
Mathematics
1 answer:
fredd [130]3 years ago
4 0

Answer:

The number of years it would take is  n  =  2 \ years

Step-by-step explanation:

From the question we are told that

         The earning per share  is  P = $3.50

          The growth rate is  r  =  7.0%

           The duration is t =  5 \ years

Generally the future value is mathematically represented as

          A =  P(1 + \frac{r}{100} )^n

 Where P is the present value

              n is the time period

         A is the future value which is mathematically evaluated as

               A =  3 * P

substituting value

            A =  3 * 3.50

            A = $ 10.5 0

So

      A =  P(1 + \frac{r}{100} )^n

       10.5 =  3.5(1 + \frac{7}{100} )^n

       10.5 = 3.225^n

Taking log of both sides

       log 10.5 = nlog 3.225

        1.0212 = n(0.5085)

         n  =   \frac{1.0212}{(0.5085)}

         n  =  2 \ years

     

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Table

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Given that a^0 = 1, means that the coefficient of the function has to be 0.8 and you discard the first and the third options.

You have to replace the values of x in the equations and compare the results.

For f(x) = 0.8 * (2^x) you get

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Answer: f(x) = 0.8 * (2^x)

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