Answer to Question #70234 in Microeconomics for Ariba

Question

The total business value of KFC in 1990 was $ 106,940. The management is expecting growth of 1.3 percent. How long KFC business would take to reach at $154,287 worth.

Answer 1

In this case $154,287 is the future value. The formula for the FV of business
earning compounding interest is:
FV = I * ((1 + R) ^ T)
Using the above example, the same $106 940 business value of KFC now. Account
with a 1.3% per year compounding interest rate would have a FV of $154,287
So, we can find a period:
$106 940 * ((1 + 0.013) ^ х) = $154 287
Х = 28,3788 years
More than 28 years is required for KFC business to reach at $154,287 worth.