Question

Your annual salary 12 years ago was $14,500; it is now $25,000. What is the average annual rate of increase?

A) 5.42%
B) 6.25%
C) 7.08%
D) 8.33%

Answer 1

The average annual rate of increase is approximately 6.03%.

Step-by-step explanation:

The average annual rate of increase can be calculated by finding the percentage change in salary over the given 12-year period.

First, we need to find the total increase in salary: $25,000 - $14,500 = $10,500.

Next, we calculate the percentage increase: ($10,500 / $14,500) × 100 = 72.41%.

Finally, we divide the percentage increase by the number of years to find the average annual rate of increase: 72.41% / 12 = 6.03%.

Therefore, the average annual rate of increase is approximately 6.03%.