Question

Oll prices have increased a great deal in the last decade. The following table shows the average oil price for each year since 1949. Many companies use oil products as a resource in their own business operations (like airline firms and manufacturers of plastic products). Managers of these firms will keep a close watch on how rising oil prices will impact their costs. The interest rate in the PV/FV equations can also be interpreted as a growth rate in sales, costs, profits, and so on. Average Oil Prices Per Per Year Barrel Year Barrel Year 1949 $2.54 1 971 $ 3.39 1993 1950 $2.51 1972 $ 3.39 1994 1951 $2.53 1 973 $ 3.89 1995 1952 $2.53 1974 $ 6.87 1996 1953 $2.68 1975 $ 7.67 1997 1954 $2.78 1976 $ 8.19 1998 1955 $2.77 1977 $ 8.85 1999 1956 52 79 1978 $ 9.00 2000 1957 $3.09 1979 $12.64 2001 1958 $3.01 1980 $21.59 2002 1959 $2.90 1981 $31.77 2003 1960 $2.88 1982 $28.52 2004 1961 $2.89 1983 $26.19 2005 1962 $2.90 1984 $25.88 2006 1963 $2.89 1985 $24.09 2007 1964 $2.88 1986 $12.51 2008 1965 $ 2.86 1987 $15.40 2009 1966 $2.88 1988 $12.58 2010 1967 $2.921989 $15.86 2011 1968 $2.94 1990 $20.03 2012 1969 $3.091991 $16.54 2013 1970 $3.181992 $15.99 2015 per Barrel $14.25 $13.16 $14.62 $18.46 $17.23 $10.87 $15.56 $26.72 $21.84 $22.51 $27.54 $38.93 $ 46.47 $58.30 $64.67 $91.48 $53.48 $71.21 $87.04 $93.02 $97.91 $93.26 $48.79 2014 Using the 1949 oll price and the 1976 oil price, compute the annual growth rate in oil prices during those 27 years. (Round your answer to 2 decimal places.) Annual growth rate

Answer 1

Here is the growth rate using 1949 and 1976

Base year 1949	Oil price	Growth rate during 27 years
1949	2.54
1976	8.19	3.22
Base year 1949	Oil price	Growth rate during 27 years
1949	2.54
1950	2.51	0.99
1951	2.53	1.00
1952	2.53	1.00
1953	2.68	1.06
1954	2.78	1.09
1955	2.77	1.09
1956	2.79	1.10
1957	3.09	1.22
1958	3.01	1.19
1959	2.9	1.14
1960	2.88	1.13
1961	2.89	1.14
1962	2.9	1.14
1963	2.89	1.14
1964	2.88	1.13
1965	2.86	1.13
1966	2.88	1.13
1967	2.92	1.15
1968	2.94	1.16
1969	3.09	1.22
1970	3.18	1.25
1971	3.39	1.33
1972	3.39	1.33
1973	3.89	1.53
1974	6.87	2.70
1975	7.67	3.02
1976	8.19	3.22