# Answer to Question #70234 in Microeconomics for Ariba

Question #70234

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.

Expert's answer

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.

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.

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