A companys revenue increases by 12% each year. If the revenue was $500,000 last year, what will it be in 3 years?

Fri, 17 Apr 2026 12:19:31 +0000

**Why A Company’s Revenue Grows by 12% Each Year — And How That 3-Year Trajectory Adds to $1.2 Million (Protractedly)** Why is a 12% annual revenue rise capturing attention across finance circles? In an era defined by economic adaptation and digital transformation, steady double-digit growth signals resilience and smart strategy—qualities that define successful businesses today. For companies consistently outpacing market averages, a recurrence of 12% year-over-year underscores disciplined revenue management and evolving customer demand. This steady climb isn’t an anomaly; it reflects real structural momentum. When last year’s $500,000 revenue hits steady gains, projecting forward reveals not just numbers, but a compelling story of sustainable growth. **Understanding the 12% Growth Engine**
A 12% year-over-year revenue increase means profits grow by one-fifth each year—amplified over time thanks to compounding. Starting at $500,000, this translates to:
Year 1: $500,000 × 1.12 = $560,000
Year 2: $560,000 × 1.12 = $627,200
Year 3: $627,200 × 1.12 = $702,464 While the final figure $702,464 falls slightly short of a rounded $700,000 mark, the broader truth lies in confirming that such growth isn’t magic. It’s the result of strategic pricing, expanding customer bases, operational efficiency, and responsive digital engagement. For many US-based companies, especially in tech, e-commerce, and professional services, 12% or higher annual growth now marks a benchmark, not a fluke.