Question

What is the growth rate of the following?

y=1.07^(x)

1. 0.7%
2. 7%
3. 107%
4. 93%

Answer 1

1.07 = 1 + 0.07 = 100% + 7%

The growth rate is 7%

An example would be say you start off with 100 items. Multiply this with 1.07 and you should get 107 as a result, which is an increase of 7% (note how 7% of 100 = 7)