Posted by **Gayla** on Thursday, January 29, 2009 at 12:15am.

An amount of $500 was invested in 1970 and the investment grew as shown in the following table. The average rate of change of the investment between 1975 and 1980 is ___ per year.

Year 1970 1975 1980 1985

Capital 500 966 1856 3578

- College Algebra -
**drwls**, Thursday, January 29, 2009 at 1:18am
There are two ways of doing this, and they give different answers. The change between 1975 and 1980 is $890 in 5 years, or $178 per year. That is 18.4% of the INITIAL amount per year. But it is not the average annual rate of change during the five year peiod

The best way to compute the annual rate of change, r, for that five year period is to use the formula

(1 +r)^5 = 1856/966 = 1.9213

This leads to

1 + r = 1.1395

r = 13.95 % per year

## Answer this Question

## Related Questions

- investment - A certain amount of money is invested at 6% per year. A second ...
- investment - A certain amount of money is invested at 6% per year. A second ...
- Algebra - Amount of an investment. AMount of an investment rate r is given by A=...
- College Algebra - Investment A: $5,000 invested for 7 years compounded ...
- continuous compounding? - $50,000 that was invested in 1970 was worth $134,100 ...
- algebra - determine the amount of an investment if $500 is invested at an ...
- Algebra - Determine the amount of an investment if $500 is invested at an ...
- algebra - A grandmother is looking for a plan to finance her new grandchild’s ...
- Algebra 2 - Sally invested a total of $4500, some at 9% per year and the rest at...
- Algebra @ - Sally invested a total of $4500, some at 9% per year and the rest at...