Question

What is the growth factor of the following example? Assume time is measured in the units given.

Water usage is increasing by 3% per year.

Answer 1

The growth factor is option c. 1.03 per year

Explanation:

Growth rate: r = 3% = 3 / 100 → r = 0.03

Growth factor: b = 1+r

Replacing r by 0.03 in the formula above:

b = 1+0.03

b = 1.03

Answer: The growth factor is 1.03 per year