Question

CH5

Assume the average vehicle selling price in the United States last year was $40,000. The average price 4 years earlier was $30,000. What was the annual increase in the selling price over this time period?

Group of answer choices

7.46 percent

4.99 percent

3.59 percent

6.21 percent

Answer 1

A. 7.46 percent

Annual increase = (FV / PV)^1/t - 1

Annual increase = ($40,000 / $30,000)^1/4 - 1

Annual increase = 0.0746 or 7.46%