Geometric mean percent increase

Question

Production of passenger cars in Japan increased from 3.34 million in 1999 to 6.94 million in 2009. What is the geometric mean annual percent increase?

Answer 1

To find the geometric mean annual percent increase, we need to calculate the annual growth rate that, if applied repeatedly for ten years, would result in a total increase of 6.94/3.34 = 2.07.

We can use the following formula to calculate the annual growth rate:

annual growth rate = (total increase)^(1/number of years) - 1

In this case, the number of years is 10, so we have:

annual growth rate = (2.07)^(1/10) - 1 = 0.0779 or 7.79%

Therefore, the geometric mean annual percent increase in passenger car production in Japan from 1999 to 2009 was 7.79%.