Total revenue for Apple Computers (in millions) was $42,905 in Year 1, $65,225 in Year 2, and $108,249 in Year 3. The average growth rate of revenue during these three years is the closest to ________.
A) 36.13%
B) 39.33%
C) 58.84%
D) 58.99%

Question

Quizplus · Accepted Answer

To calculate the average growth rate over three years, we need to use the formula for compound annual growth rate (CAGR):

CAGR = (End Value / Start Value)^(1/n) - 1

where End Value is the total revenue at the end of the period, Start Value is the total revenue at the beginning of the period, and n is the number of years.

Plugging in the values, we get:

CAGR = ($108,249 / $42,905)^(1/3) - 1
CAGR = 1.5884 - 1
CAGR = 0.5884 or 58.84%

Therefore, the closest answer choice is C, 58.84%.

Total Revenue for Apple Computers (In Millions) Was $42,905 in Year