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An internet-based company that came into business on January 1, 2015 acquired 250 customers in the first month. If the company
had 20% month-on-month growth for the next 2 months and 10% month-on-month growth after that, how many customers did the
company have on May 1, 2015?
  • a)
    360
  • b)
    396
  • c)
    435
  • d)
    436
  • e)
    479
Correct answer is option 'B'. Can you explain this answer?
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Verified Answer
An internet-based company that came into business on January 1, 2015 a...
Given:
  • January: 250 customers
  • February: 20% month- on – month growth
  • March: 20% month – on – month growth
  • April: 10% month – on – month growth
To Find: Number of customers on May 1
 
Approach:
  1. Number of customers on May 1 = Number of customers on Apr 1 + Growth in Apr
    • Growth in Apr = (Growth Rate in Apr)*(Customers on Apr 1)
    • So, Number of customers on May 1 = (1 + Growth Rate in Apr)*(Number of customers on Apr 1)
  2. Similarly, Number of customers on Apr 1 = (1 + Growth Rate in Mar)*(Number of customers on Mar 1)
  3. Number of customers on Mar 1 = (1 + Growth Rate in Feb)*(Number of customers on Feb 1)
  4. Number of customers on Feb 1 = Number of customers acquired during Jan
Working out:
Looking at the answer choices, we see that Option B is the correct answer
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An internet-based company that came into business on January 1, 2015 acquired 250 customers in the first month. If the companyhad 20% month-on-month growth for the next 2 months and 10% month-on-month growth after that, how many customers did thecompany have on May 1, 2015?a)360b)396c)435d)436e)479Correct answer is option 'B'. Can you explain this answer?
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