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    cindybobbykatrina's Avatar
    cindybobbykatrina Posts: 3, Reputation: 1
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    #1

    Feb 6, 2008, 06:23 PM
    Geometric mean rate of increase
    Is this correct: find the geometric mean rate of increase. The question is a recent article suggested that if you earn $25,000 a year today and the inflation rate continues at 3 percent per year, you'll need to make $33,598 in 10 years to have the same buying power.

    (33598/25000)^1/10 = 1.03 is this all I need to do.
    PolluxCastor's Avatar
    PolluxCastor Posts: 117, Reputation: 5
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    #2

    Feb 6, 2008, 06:52 PM
    It would probably be better written as:

    33598 = 25000 * 1.03^10

    But the 2 are the same equation rearranged a little (and correct by the way).
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