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PUIS Your parents are complaining about the price of items today compared to what they cost years ago. If an automobile that
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Answer #1

Suppose we are in 1970

Present value in 1970 = PV = $15000

Future value in 2018 = FV = $45000

Time period = n = 2018 - 1970 = 48

Annual growth rate = r

Present value (PV) is calculated using the formula:

PV = FV/(1+r)n

15000 = 45000/(1+r)48

(1+r)48 = 45000/15000

1+r = 31/48

1+r = 1.02315169047767

r = 1.02315169047767 - 1 = 0.02315169047767 = 2.315169047767% ~ 2.32% (Rounded to two deciamls)

Answer -> 2.32% (Option E)

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