4. A firm's net income last year was $1.5 million. Its net income grew 5 percent during the last 5 years. If that growth rate continues, how long will it take for the firm's net income to double?

Answer 1

Growth rate = 5%/5yrs. = 1%/yr.

A = Po + Po*r*t = 3 Million.
1.5 + 1.5*0.01*t = 3
1.5 + 0.015t = 3
0.015t = 1.5
t = 100 Years.