Question

In 2014, Apple's revenue was $183 billion, and it grew to $267 billion in 2018.

a. What is the nominal growth rate of Apple's revenue from 2014 to 2018? (Please round all answers to one decimal place.)
Nominal Growth Rate from 2014 to 2018 =
b. What is the value of Apple's 2018 revenue in 2014 dollars? (In 2014, the CPI was 236.7, and in 2018, it was 251.1.)
Revenue from 2018 in 2014 dollars=
45.9
Growth in Revenue from 2014 to 2018=
252.4
c. What is the real growth rate of Apple's revenue from 2014 to 2018?
38
billion dollars

Answer 1

The nominal growth rate of Apple's revenue from 2014 to 2018 is 45.9%. The 2018 revenue in 2014 dollars is approximately $252.4 billion. The real growth rate is approximately 37.9%.

Step-by-step explanation:

To calculate the nominal growth rate of Apple's revenue from 2014 to 2018, we use the following formula:

Nominal Growth Rate = ((Revenue in 2018 - Revenue in 2014) / Revenue in 2014) × 100

Substituting the given values, we get:

Nominal Growth Rate = (($267 billion - $183 billion) / $183 billion) × 100

This simplifies to a nominal growth rate of approximately 45.9%.

To find the value of Apple's 2018 revenue in 2014 dollars, we adjust for inflation using the CPI of both years:

Revenue in 2014 dollars = Revenue in 2018 × (CPI in 2014 / CPI in 2018)

Revenue in 2014 dollars = $267 billion × (236.7 / 251.1)

Therefore, the 2018 revenue in 2014 dollars is approximately $252.4 billion.

To find the real growth rate of Apple's revenue, we compare the adjusted 2018 revenue to the 2014 revenue:

Real Growth Rate = ((Adjusted Revenue in 2018 - Revenue in 2014) / Revenue in 2014) × 100

Real Growth Rate = (($252.4 billion - $183 billion) / $183 billion) × 100

The real growth rate is approximately 37.9%.