Oil prices have increased a great deal in the last decade. The following table shows the average oil price for each year since 1949.Many companies use oil products as a resource in their own business operations (like airline firms and manufacturers of plasticproducts). Managers of these firms will keep a close watch on how rising oil prices will impact their costs. The interest rate in thePV/FV equations can also be interpreted as a growth rate in sales, costs, profits, and so on.Year19491950195119521953195419551956195719581959196019611962196319641965196619671968perbarrel$ 2.54$ 2.51$2.53$ 2.53$ 2.68$2.78$ 2.77$ 2.79$ 3.09$ 3.01$ 2.90$ 2.88$ 2.89$2.90$ 2.89$ 2.88$2.86$ 2.88$ 2.92$ 2.94Year1969197019711972197319741975197619771978197919801981198219831984198519861997198Annual growth rateAverage Oil Pricesper barrel$ 3.09$3.18$3.39$3.39$ 3.89$ 6.87Year198919901991199219931994$ 7.67 1995$8.19 1996$ 8.57 1997$9.001998$12.64 1999$ 21.59 2000$31.77 2001$ 28.52 2002$26.19 2003$25.88 2004$24.09 20052006$15.40 20072008$ 12.51$12.58per barrel$ 15.86$ 20.03$ 16.54$15.99$ 14.25$ 13.19$ 14.62$18.46$ 17.23$ 10.87$15.56$ 26.72$ 21.84$ 22.51$ 27.54$38.93$ 46.47$ 58.30$ 64.67$ 91.48%Year200920102011201220132014201520162017201820192020per barrel$ 53.48$71.21$ 87.04$93.02$97.91$93.26$48.69Using the 1949 oil price and the 1966 oil price, compute the annual growth rate in oil prices during those 17 years.Note: Round your answer to 2 decimal places.$43.14$50.88$ 65.23$ 56.99$39.23

The Compound Annual Growth Rate (CAGR) provides the mean annual growth rate of an investment over a…

Answered: Using the 1949 oil price and the 1966…

Using the 1949 oil price and the 1966 oil price, compute the annual growth rate in oil prices during those 17 years. Note: Round your answer to 2 decimal places.

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

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Chapter1: Making Economics Decisions

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Question

Oil prices have increased a great deal in the last decade. The following table shows the average oil price for each year since 1949.
Many companies use oil products as a resource in their own business operations (like airline firms and manufacturers of plastic
products). Managers of these firms will keep a close watch on how rising oil prices will impact their costs. The interest rate in the
PV/FV equations can also be interpreted as a growth rate in sales, costs, profits, and so on.
Year
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
per
barrel
$ 2.54
$ 2.51
$2.53
$ 2.53
$ 2.68
$2.78
$ 2.77
$ 2.79
$ 3.09
$ 3.01
$ 2.90
$ 2.88
$ 2.89
$2.90
$ 2.89
$ 2.88
$2.86
$ 2.88
$ 2.92
$ 2.94
Year
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1997
198
Annual growth rate
Average Oil Prices
per barrel
$ 3.09
$3.18
$3.39
$3.39
$ 3.89
$ 6.87
Year
1989
1990
1991
1992
1993
1994
$ 7.67 1995
$8.19 1996
$ 8.57 1997
$9.00
1998
$12.64 1999
$ 21.59 2000
$31.77 2001
$ 28.52 2002
$26.19 2003
$25.88 2004
$24.09 2005
2006
$15.40 2007
2008
$ 12.51
$12.58
per barrel
$ 15.86
$ 20.03
$ 16.54
$15.99
$ 14.25
$ 13.19
$ 14.62
$18.46
$ 17.23
$ 10.87
$15.56
$ 26.72
$ 21.84
$ 22.51
$ 27.54
$38.93
$ 46.47
$ 58.30
$ 64.67
$ 91.48
%
Year
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
per barrel
$ 53.48
$71.21
$ 87.04
$93.02
$97.91
$93.26
$48.69
Using the 1949 oil price and the 1966 oil price, compute the annual growth rate in oil prices during those 17 years.
Note: Round your answer to 2 decimal places.
$43.14
$50.88
$ 65.23
$ 56.99
$39.23

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