If 1122 is the 2unit growth factor what is the 1unit percent

If 1.122 is the 2-unit growth factor what is the 1-unit percent change? % b. If 0.6 is the 3-unit growth factor what is the 1-unit percent change? % c. If 0.752 is the 4-unit growth factor what is the 5-unit percent change? % d. If 32% is the 1/3 unit percent change what is the 1-unit percent change? %

Solution

a) 2 unit growth factor : [1 + r]² = 1.122

=> r = 0.0592

1 unit growth factor: 1 + r = 1.0592

1 unit percent change: (1.122 - 1.0592)/1.0592 = 5.93%

b] [1 - r]³ = 0.6

=> 1 - r = 0.6^1/3 = 0.84

therefore 1 unit percent change will be: (0.84 - 0.6)/0.6 = 40.57%

c] [1 - r]⁴ = 0.752

=> [1 - r] = 0.752^1/4 = 0.931

=> [1 - r]⁵ = 0.931⁵ = 0.7

therefore 5 unit percent change will be: (0.931 - 0.7)/0.7 = 32.94%

d)