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April 25, 2014

April 25, 2014

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

Year 1970 1975 1980 1985

Capital 500 966 1856 3578

- College Algebra -
**drwls**, Thursday, January 29, 2009 at 1:18amThere 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

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