Family Construction had sales three years ago of $2,150,000.This year their sales hit $2,900,000.What has been the firm's average annual rate of growth of sales?
A)30.56%
B)10.49%
C)$350,000 per year
D)None of the above

Question

Quizplus · Accepted Answer

To calculate the average annual rate of growth of sales, we use the formula: ((Ending value / Beginning value)^(1/number of years)) - 1

Plugging in the values, we get: 
((2,900,000 / 2,150,000)^(1/3)) - 1 = 0.1049 or 10.49%

Therefore, the correct answer is B.

Family Construction Had Sales Three Years Ago of $2,150,000