SOLUTION: the price of certain commodity increases by 20% in 1991 and by 30% in 1992 and by 45% in 1993. what is the average percentage rate in the price of the commodity?

Question 508356: the price of certain commodity increases by 20% in 1991 and by 30% in 1992 and by 45% in 1993. what is the average percentage rate in the price of the commodity?
Answer by stanbon(75887) (Show Source): You can put this solution on YOUR website!
the price of certain commodity increases by 20% in 1991 and by 30% in 1992 and by 45% in 1993. what is the average percentage rate in the price of the commodity?
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Let starting price be "x"
In '91 the price is 1.2x
In '92 the price is 1.3(1.2)x
In '92 the price is 1.45(1.3)(1.2x)
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The final price is 2.262x
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Increase over the 3 years is 2.262x-x = 1.262x
Average increase over the 3 years is 1.262/3 = 0.4207 = 42.07%
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Cheers,
Stan H.

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