Year 2000
Profit = 4 million
This is a compound growth problem. The formula is:
[tex]F=P(1+r)^t[/tex]Where
P is the intial amount (in our case, P = 4 million)
F is the final amount (what we need to find, profit in 2003)
r is the rate of growth (here, it is 15% per year, that is 15/100 = 0.15)
t is the time in years (From 2000 to 2003, it is 3 years, thus, t = 3)
Substituting the values, we have:
[tex]\begin{gathered} F=P(1+r)^t \\ F=4(1+0.15)^3 \\ F=4(1.15)^3 \\ F=6.0835 \end{gathered}[/tex]With the same 15% growth, the profit of the company is expected to be $6.1 million in 2003.
Answer
6.1 million dollars