Simpson Construction had sales seven years ago of $2,150,000.This year their sales hit $4,600,000.What has been Simpson's average annual rate of growth of sales?

Question

Quizplus · Accepted Answer

The formula for average annual growth rate is [(Ending Value/Beginning Value)^(1/Number of Years)]-1. Plugging in the values, we get [(4,600,000/2,150,000)^(1/7)]-1 = 0.1148 or 11.48%. Therefore, the answer is B, 11.48%.

Simpson Construction Had Sales Seven Years Ago of $2,150,000