At Parkin's firm's annual revenue grows twice as fast as its costs. In 2007 it operated at a $1000 loss, it broke even in 2008, and in 2009 its revenues were 44% higher than in 2007. If the firm's revenues and costs grew at a constant rate over this period, what was its profit in 2009?  Choose the most appropriate option: A) 700 B) 1000 C) 1300 D) 1600 E) 2000
At Parkin's firm's annual revenue grows twice as fast as its costs. First solve for how much revenue is increasing each year:   R2008= R2007*(1+x)   R2009= R2007*(1+x)^2=1.44*R2007   (1+x)^2 = 1.44   1+x=1.2   x=0.2 aka revenue increases 20% each year and cost increases 10% annually   Next solve for R2007and 13002007:   R2007= 13002007- 1000   1.2*R2007- 1.1*13002007= 0   1.2*[13002007- 1000] - 1.1*13002007= 0   0.1*13002007= 1,200   13002007= 12,000   R2007= 11,000   Finally find 2009 profits:   Profit2009= 1.44*11,000 - 1.21*12,000   Profit2009= 15,840 - 14,520   Profit2009= 1320   Answer: 1300
<result>C</result>
At Parkin's firm's annual revenue grows twice as fast as its costs. In 2007 it operated at a $1000 loss, it broke even in 2008, and in 2009 its revenues were 44% higher than in 2007. If the firm's revenues and costs grew at a constant rate over this period, what was its profit in 2009?