Question

For three consecutive years the cost of gasoline increased by 8%, 15%, and 20%, respectively. What was the overall percentage increase of the cost of gasoline during the three-year period?

Answer 1

The overall percentage increase in the cost of gasoline over three consecutive years, with increases of 8%, 15%, and 20% respectively, is calculated to be 49.04%.

Step-by-step explanation:

To calculate the overall percentage increase in the cost of gasoline during the three-year period where it increased by 8%, 15%, and 20% respectively, we need to use compound percentage growth.

1. Let's assume that the original price of gasoline is $1 (for ease of calculation).
2. First-year increase: $1 increased by 8% becomes $1 × (1 + 0.08) = $1.08.
3. Second-year increase: $1.08 increased by 15% becomes $1.08 × (1 + 0.15) = $1.242.
4. Third-year increase: $1.242 increased by 20% becomes $1.242 × (1 + 0.20) = $1.4904.

To find the overall percentage increase, the final price of $1.4904 is compared to the original price of $1.

Overall percentage increase = (($1.4904 - $1) / $1) × 100% = 49.04%

Therefore, the overall percentage increase in the cost of gasoline over the three consecutive years is 49.04%.