The price of a certain commodity is a function of supply and demand. The table below shows the price of commodity per barrel between 1995 and 2000. Find the average anual rate of change between 1998 and 2000.
Year Price/barrel
1995 $19
1996 $24
1997 $17
1998 $11
1999 $24
2000 $35
Please explain how to get the answer
98-99
24 - 11 = 13
13/11 = 1.18 = 118%
99-00
35 - 24 = 11
11/24 = 0.458 = 45.8%
(118 + 45.8)/2 = ?
To find the average annual rate of change between 1998 and 2000, follow these steps:
Step 1: Calculate the change in price over the given years. Subtract the initial price in 1998 from the final price in 2000.
Price change = Final price - Initial price
Price change = $35 - $11
Price change = $24
Step 2: Calculate the number of years between the initial year (1998) and the final year (2000). In this case, it is two years.
Number of years = Final year - Initial year
Number of years = 2000 - 1998
Number of years = 2
Step 3: Calculate the average annual rate of change. Divide the price change (step 1) by the number of years (step 2).
Average annual rate of change = Price change / Number of years
Average annual rate of change = $24 / 2
Average annual rate of change = $12
Therefore, the average annual rate of change between 1998 and 2000 is $12 per barrel.