The metropolitan area of Los Angeles–Long Beach, California, showed the largest

Question

The metropolitan area of Los Angeles–Long Beach, California, showed the largest increase in the number of jobs between 1987 and 2005. The number of jobs increased from 5,167,100 to 6,271,200. What was the geometric mean expected yearly rate of increase? (Round your answer to 2 decimal places.)

The metropolitan area of Los Angeles–Long Beach, California, showed the largest increase in the number of jobs between 1987 and 2005. The number of jobs increased from 5,167,100 to 6,271,200. What was the geometric mean expected yearly rate of increase? (Round your answer to 2 decimal places.)

Explanation / Answer

Let

r = geometric rate

Thus,

6271200 = 5167100*(1+r)^(2005-1987)

6271200 = 5167100*(1+r)^(18)

6271200/5167100 = (1+r)^(18)

1.213678853 = (1+r)^(18)

1 + r = 1.010816756

r = 0.010816756 or 1.08% [ANSWER]

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