Sam has been running his swimming pool cleaning business now for five years. He is considering enlarging his service area to a 100 mile radius, which would require two new offices in different parts of town. He would like to take out a business loan to cover the cost of expansion.The profits for Sam's business over the last 5 years are outlined in the table below. According to this information, what would be the best estimate for Sam to quote as expected profits in the next year in his new business plan?Business YearNet Profit1$43,502.252$47,417.453$51,685.024$56,336.685$61,406.98
The profits increase by about 9% each year: for example, $47,417.45 is 1.09 times $43,502.25. Estimate next year's profit by multiplying the fifth-year profit by 1.09: $61,406.98 × 1.09 = $66,933.61, which rounds to the listed estimate of $66,933.60. So the best estimate is $66,933.60.
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