Every year your firm employs 12% more employees. If your firm started with three employees, how many people will be employed after 10 years?
To solve this problem, we can use the formula for compound interest, which is:
A = P(1 + r)^n
Where:
A = final amount
P = initial amount
r = rate of increase (in decimal form)
n = number of years
In this case:
P = 3 (initial number of employees)
r = 0.12 (12% increase in employees per year)
n = 10 years
A = 3(1 + 0.12)^10
A = 3(1.12)^10
A = 3(2.85311671)
A = 8.559350126
Therefore, after 10 years, the firm will employ approximately 8 people.