At Ram'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 correct choice from the following answers:
A) 700  B) 1000  C) 1300  D) 1600  E) 2000
At Ram'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 Ram'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?