You gave your little sister two rabbits for Easter three years ago and now she has 84 of the cute little bunnies.What is the average annual rate of increase in the number of rabbits your sister owns? Note: Your parents are not very pleased with you right now.
A)247.60%
B)14.00%
C)410.00%
D)The TVM equations are designed for currency amounts and cannot be used for non-financial calculations such as this one.

Question

Quizplus · Accepted Answer

The average annual rate of increase can be calculated using the formula for compound annual growth rate (CAGR): CAGR = (Ending Value/Beginning Value)^(1/Number of Years) - 1. Here, the beginning value is 2, the ending value is 84, and the number of years is 3. Plugging these values into the formula gives a CAGR of approximately 247.60%.

You Gave Your Little Sister Two Rabbits for Easter Three