Question

In October 2017 a pound of apples cost $1.55, while oranges cost $1.19. Two years earlier the price of apples was only $1.34 a pound and that of oranges was $1.05 a pound. What was the annual compound rate of growth in the price of apples

Answer 1

The annual growth rate in the price of the apple will be 7.83%.

What is the growth rate?

The growth rate is defined as the increment of any quantity over a period of time.

Given that:-

• In October 2017 a pound of apples cost $1.55, while oranges cost $1.19.
• Two years earlier the price of apples was only $1.34 a pound and that of oranges was $1.05 a pound.

The growth rate will be calculated as::-

Growth rate =  Cost in 2017  /  Cost in 2015

Growth rate =  1.55  /  1.34  =  1.15

The growth rate will be 15.67% for the apple in 2 years so for 1 year it will be

15.67 / 2 = 7.8%

Therefore the annual growth rate in the price of the apple will be 7.83%.

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