In 1958 the average tuition for one year at an Ivy League school was $1,800.Thirty years later, in 1988, the average cost was $13,700.What was the growth rate in tuition over the 30-year period?
A)12%
B)9%
C)6%
D)7%
E)8%

Question

Quizplus · Accepted Answer

The growth rate can be calculated using the formula for compound annual growth rate (CAGR): CAGR = (Ending Value/Beginning Value)^(1/Number of Years) - 1. Plugging in the values: CAGR = ($13,700/$1,800)^(1/30) - 1 ≈ 0.0707 or 7%.

In 1958 the Average Tuition for One Year at an Ivy