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diracdeltafunc
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#1
Report Thread starter 5 years ago
#1
Hi all,

Could someone point me in the right direction with this question please:


A company was told to grow by 20% every year for 3 years. Mr A wanted that same overall growth in 2 years. What annual growth rate would this require?


31.5
33.3
30.0
26.5
36.4


My attempt:

If the growth rate for 3 years was 20% then it is :
 (1.2)^3 = 1.728

Now if the above is for 3 years then for 2 years it would be :

 (1.2)^3 \times \frac{2}{3} However this isnt right!
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TenOfThem
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#2
Report 5 years ago
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(Original post by diracdeltafunc)
Hi all,

Could someone point me in the right direction with this question please:


A company was told to grow by 20% every year for 3 years. Mr A wanted that same overall growth in 2 years. What annual growth rate would this require?


31.5
33.3
30.0
26.5
36.4


My attempt:

If the growth rate for 3 years was 20% then it is :
 (1.2)^3 = 1.728

Now if the above is for 3 years then for 2 years it would be :

 (1.2)^3 \times \frac{2}{3} However this isnt right!
You know that you want that growth in 2 years so you want

(1.?)^2 = 1.728
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diracdeltafunc
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#3
Report Thread starter 5 years ago
#3
(Original post by TenOfThem)
You know that you want that growth in 2 years so you want

(1.?)^2 = 1.728
You make everything seem so easy!

Thank you so much once again
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