A factory increased its production of cars from 80000 in the year 2011-2012 to 92610 in 2014-15. Find the annual rate of growth of production of cars.
Solution:
It is given that
Production of cars in 2011-2012 = 80000
Production of cars in 2014-2015 = 92610
Period (n) = 3 years
Consider r% as the rate of increase
We know that
A/P = (1 + r/100)n
Substituting the values
92610/80000 = (1 + r/100)3
By further calculation
(21/20)3 = (1 + r/100)3
We can write it as
1 + r/100 = 21/20
r/100 = 21/20 – 1 = 1/20
By cross multiplication
r = 1/20 × 100 = 5
Hence, the annual rate of growth of production of cars is 5% p.a.
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