"If the public service commission grants this increase, it will mean that between 1970 and 1987, the electric rates will have increased by more than 478 percent. That's an average rise of over 27 percent a year!" Is this correct? If not, what annual percent increase of 17 years leads to a total increase of 478 percent?

Question

"If the public service commission grants this increase, it will mean that between 1970 and 1987, the electric rates will have increased by more than 478 percent.  That's an average rise of over 27 percent a year!"  Is this correct?  If not, what annual percent increase of 17 years leads to a total increase of 478 percent?

anonymous · Answer

Well, 17 years and 478% increase total.

What is per year? Hmmmmm....I see some basic division involved here.

anonymous · Answer

sorry about the duplicates.  I realize that 478/17= 28.1, but she said an average of 27 percent per year

anonymous · Answer

OK. So, that is not true.

Then, say 28.1 annual leads to 478% over 17 years.

anonymous · Answer

its just weird, because that doesnt fit the rest of the problems at all.   I'm working with exponential growth/decay with equations like $$y=e ^{kt}$$

anonymous · Answer

Oh yeah. In that case, you need to look at the compounding of the growth (increase).
(1+r)^17 = 4.78
r = ?

anonymous · Answer

x= .0877 - so a rate of 8.7 percent, meaning she was wrong.  I think that's it?

anonymous · Answer

Do I need to plug that rate into something else?

anonymous · Answer

That sounds right.