Rent-A-Car, Inc., provides daily auto rental services to individuals while their own cars are being repaired. Annual sales revenue has grown rapidly from $2.5 million to $10 million during the past 5-year period. Calculate the five-year growth rate in sales using the constant growth model with annual compounding.
Using constant growth model with annual compounding, we have
E(t) = E(0) * (1 + g)^t