if the price of milk has quadrupled (that is, grown four times) over the past 25 years, what has been the annual rate of inflation in milk price over that time period?
To calculate the annual rate of inflation in the price of milk over the past 25 years, we need to divide the total percentage increase by the number of years.
1. First, let's determine the total percentage increase in the price of milk over 25 years. Since the price has quadrupled, it means it has increased fourfold. Therefore, the total percentage increase is 4-1, which equals 3.
2. Next, we divide the total percentage increase by the number of years (25) to find the annual rate of inflation. So, we divide 3 by 25.
Annual rate of inflation = Total percentage increase / Number of years
Annual rate of inflation = 3 / 25
3. Now, let's calculate the annual rate of inflation:
Annual rate of inflation = 3 / 25 = 0.12
The annual rate of inflation in the price of milk over the past 25 years is 0.12, or 12%.
Therefore, the annual rate of inflation in the milk price over that time period is 12%.