Table 13-1
$\begin{array}{|l|l|l|l|l|l|}
\hline\text{ Year }& 1998 & 1999 & 2000 & 2001 & 2002 \
\hline\text{ Amount} & 1323 & 1450 & 1480 & 1500 & 1512 \
\hline \text{Index} & 100 & 109.6 & 111.9 & 113.4 & 114.3 \
\hline
\end{array}$

With reference to Table 13-1, what is the average annual growth rate of the index from 1998 to 2001?
A) 3.4%
B) 3.2%
C) 4.3%
D) 4.5%

Question

Table 13-1
$\begin{array}{|l|l|l|l|l|l|}
\hline\text{ Year }& 1998 & 1999 & 2000 & 2001 & 2002 \
\hline\text{ Amount} & 1323 & 1450 & 1480 & 1500 & 1512 \
\hline \text{Index} & 100 & 109.6 & 111.9 & 113.4 & 114.3 \
\hline
\end{array}$

With reference to Table 13-1, what is the average annual growth rate of the index from 1998 to 2001?
A) 3.4%
B) 3.2%
C) 4.3%
D) 4.5%

Quizplus · Accepted Answer

The average annual growth rate can be calculated using the formula for compound annual growth rate (CAGR), which is $\text{CAGR} = \left(\frac{\text{Ending value}}{\text{Beginning value}}\right)^{\frac{1}{\text{n}}} - 1$, where n is the number of periods. From 1998 to 2001, the index grew from 100 to 113.4 over 3 years. Thus, $\text{CAGR} = \left(\frac{113.4}{100}\right)^{\frac{1}{3}} - 1 \approx 0.043$ or 4.3%.

Table 13-1 With Reference to Table 13-1, What Is the Average Annual