eBook The current value of a company is S24 million Ir the v

eBook The current value of a company is S24 million. Ir the value of the company six years ago was S9 million, what is the company\'s mean annual growth rate over the past six years (to 1 decimal)? 27.8 % Hide Feedback Incorrect Check My Work (2 remaining)

Solution

Mean annual growth rate = compound annual growth rate

Compound annual growth rate = (Ending value / Beginning value)^{(1 / n)} - 1

Here, Ending value = $24 million

         Beginning value = $9 million

        Number of years = n = 6

Mean Annual growth Rate = ( 24 / 9 )^{(1 / 6)} - 1

                                      = 0.17759 or 17.759%