Four years ago,Robert's annual salary was $52,500.Today,he earns $73,800.What has been the average annual rate of growth of Robert's salary?
A)$5,325 per year
B)10.38%
C)41.52%
D)8.89%

Question

Quizplus · Accepted Answer

The average annual rate of growth can be calculated using the formula for compound annual growth rate (CAGR): CAGR = [(Final Value/Initial Value)^(1/Number of Years)] - 1. Plugging in the values: CAGR = [($73,800/$52,500)^(1/4)] - 1 = 0.0889 or 8.89%.

Four Years Ago,Robert's Annual Salary Was $52,500