Answer:
the annual growth rate between 1985 and 2005 is 1.38%
Explanation:
The computation of the annual growth rate between 1985 and 2005 is shown below:
Future value = Present value × e^(rate × time period)
$145,000 = $110,000 × e^(rate, 20)
$145,000 ÷ $110,000 = e^(rate, 20)
e^(rate, 20) = 1.318
Now take the log in both the sides
In(e^(rate, 20)) = ln(1.318)
r = ln(1.318) ÷ 20
= 1.38%
Hence, the annual growth rate between 1985 and 2005 is 1.38%
