Assume the price of salt increased from $0.30 in 1985 to $0.50 in 1995.If we calculate the average rate of price increase for salt over this period,we could accurately say:
A) the price of salt increased at about a 40% rate per year during this period.
B) the price of salt increased at about a 20% rate per year during this period.
C) the price of salt increased by about 20% total during this period.
D) the price of salt increased at about a 5% rate per year during this period.
E) the real price of salt definitely increased during the period.

Question

Quizplus · Accepted Answer

The average annual rate of increase can be calculated using the formula for compound annual growth rate (CAGR), which is approximately 5% per year over the 10-year period.

Assume the Price of Salt Increased from $0