Eckelberger Products, Inc. makes high-speed recorders with high-speed scanning. The small company has been growing at an average rate of 75% per year for the past 4 years. The CEO asked you to convert the past growth rate into a monthly rate for its annual report. If the past growth rate was an effective rate, what was the effective growth rate per month?
What will be an ideal response?
0.75 = (1 + r/12)¹² – 1
r/12 = (1 + 0.75)^1/12 – 1
= 4.77% per month
or using Equation [4.4] with m = 12
i = (1 + 0.75)^1/12 – 1
= (1.75)0.08333 – 1
= 0.477 (4.77% per month)
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Engineers shall issue no statements, criticisms, or arguments on technical matters that are inspired or paid for by interested parties, unless they have prefaced their comments by explicitly identifying the interested parties on whose behalf they are speaking, and by revealing the existence of any interest the engineers may have in the matters.
a. True b. False