In mid-2010 a pound of apples cost $1.28, while oranges cost $1.12. Ten years earlier the price of apples was only $.93 a pound and that of oranges was $.71 a pound.

In mid-2010 a pound of apples cost $1.28, while oranges cost $1.12. Ten years earlier the price of apples was only $.93 a pound and that of oranges was $.71 a pound.

a.	What was the annual compound rate of growth in the price of the two fruits? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

	Annual
Compound rate growth for apples	%
Compound rate growth for oranges	%

b.	If the same rates of growth persist in the future, what will be the price of apples in 2030? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Price of apples in 2030

$

c.	What about the price of oranges? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Price of oranges in 2030

$

Explanation:

Some values below may show as rounded for display purposes, though unrounded numbers should be used for the actual calculations.

a.

Rate of growth for apples: $.93 × (1 + r)10 = $1.28 r = 3.25%

Rate of growth for oranges: $.71 × (1 + r)10 = $1.12 r = 4.66%

b.

Price of apples in 2030: $1.28 × (1.03246)20 = $2.42

c.
Price of oranges in 2030: $1.12 × (1.04664)²⁰ = $2.79