In a factory, the production of scooters rose to 48400 from 40000 in 2 years. The rate of growth per…
The correct choice is: “10%” Growth compounds each year, so 40000 × (1 + r)2 = 48400. (1 + r)2 = 48400 ÷ 40000 = 1.21, so 1 + r = 1.1 and r = 10% per annum. Check: 40000 →…
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In a factory, the production of scooters rose to 48400 from 40000 in 2 years. The rate of growth per annum is
Answer and explanation
Correct answer B
The correct choice is: “10%”
Growth compounds each year, so 40000 × (1 + r)2 = 48400.
(1 + r)2 = 48400 ÷ 40000 = 1.21, so 1 + r = 1.1 and r = 10% per annum.
Check: 40000 → 44000 (after year 1) → 48400 (after year 2). The total growth over two years is 21%, so “20%” cannot be the annual rate.
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