In 1981 the average tuition for one year at a certain state school was $1,800.Thirty years later,in 2011,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 7.07%, which rounds to 7%.

In 1981 the Average Tuition for One Year at a Certain