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In a company's first year in operation, it made an annual profit of \$379,000$379,000. The profit of the company increased at a constant 27% per year each year. How much total profit would the company make over the course of its first 16 years of operation, to the nearest whole number

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anthougo

The amount of total profit that the company would make over the course of its first 16 years of operation is $62,885,046.

What is future value?

The future value of the profits earned over 16 years can be computed as the first year's profit of $379,000 multiplied by the future value annuity factor at 27% for 16 years.

Alternatively, the future value can be computed using an online finance calculator as below.

Data and Calculations:

N (# of periods) = 16 years

I/Y (constant increase in profit per year) = 27%

PV (Present Value) = $0

PMT (Periodic Payment or Annual profit in the first year) = $379,000

Results:

FV = $62,885,046.22 ($6,064,000 + $56,821,046.22)

Sum of all periodic payments = $6,064,000 ($379,000 x 16)

Constant increase in profit = $56,821,046.22

Thus, the amount of total profit that the company would make over the course of its first 16 years of operation is $62,885,046.

Learn more about future value at https://brainly.com/question/24703884

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