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 milk price over a certain time period, we need to divide the overall price increase by the number of years. In this case, we know that the price of milk has quadrupled over the past 25 years.
To find the annual rate of inflation, we need to determine the factor by which the price of milk has increased each year. Since the price has quadrupled, we can use the concept of the nth root of a number to find the factor. In this case, the number is 4 (since the price has quadrupled) and the root is the number of years, which is 25.
Calculating the annual rate of inflation:
Factor = 4^(1/25)
Using a calculator, we find that the factor is approximately 1.0761.
To convert the factor into a percentage, subtract 1 and multiply by 100.
Annual inflation rate = (1.0761 - 1) x 100
This gives us an annual rate of inflation in the price of milk over the past 25 years of approximately 7.61%.