In 1983 there were 316100 cell phone subscribers in the Unit

In 1983, there were 316,100 cell phone subscribers in the United States. By 2008, the number of cell phone subscribers increased to 262,846,000. What is the geometric mean annual increase for the period? (Round your answer to 2 decimal places.)

Solution

Let us assume that the average annual growth rate is \'r\'

Time period = 25 years

316,100 ( 1 + r )²⁵ = 262,846,000

( 1 + r )²⁵ = 262,846,000 / 316,100

1 + r = (831.7911)^1/25

= 1.3085

Thus,

r = 30.85% is the average geometric annual rate of increase

Hope this helps.