Question

In 2009, Internationale Outstanding University (IOU) had an enrollment of 25,992 undergraduates, each of whom paid $6,198 per year in tuition. In 2010, enrollment was 27,670 students, and tuition was raised 3.1%. In 2011, IOU received $186.8M in revenue from student tuition, and enrollment was 26,871 students. In 2012, it is estimated that tuition will be $6,937 and IOU needs to receive 5.0% more total revenue from tuition than in 2011.

What will be the compounded annualized growth rate (CAGR) of tuition for 2009 to 2012?

Answer 1

The compounded annualized growth rate (CAGR) of tuition at Internationale Outstanding University (IOU) from 2009 to 2012 is approximately 3.85%.

Step-by-step explanation:

To calculate the compounded annualized growth rate (CAGR) of tuition for 2009 to 2012 at Internationale Outstanding University (IOU), we can use the CAGR formula:

CAGR = (EV/BV)^(1/n) - 1

where:
EV = End Value of tuition
BV = Beginning Value of tuition
n = Number of periods (years)

In this case, the beginning tuition in 2009 was $6,198 and the estimated end value in 2012 is $6,937. The number of periods is 3 years (from the end of 2009 to the end of 2012).

Using these values, the CAGR calculation would be:

CAGR = ($6,937 / $6,198)^(1/3) - 1

CAGR = (1.1192)^(0.3333) - 1

CAGR = 1.0385 - 1

CAGR = 0.0385 or 3.85%

The annualized growth rate of tuition from 2009 to 2012 is approximately 3.85%.