Lesson eLearning

A textile factory produced 5000 tonnes of fabric in 2015 and 7500 tonnes in 2018. What is the Compound Annual Growth Rate (CAGR) of production over these three years? Express your answer in % to one decimal place.

medium 2 marks Class 10 · Geography · Manufacturing Industries
Answer
14.5

The correct answer is 14.5 — Step 4: Convert to percentage: 0.1447 × 100 ≈ 14.5%.

Step-by-step solution

  1. Step 1: Compute the growth factor: 7500 ÷ 5000 = 1.5.
  2. Step 2: Calculate the cube root of 1.5 to get annual growth multiplier: (1.5)^(1/3) ≈ 1.1447.
  3. Step 3: Subtract 1 to obtain the growth rate: 1.1447 – 1 = 0.1447.
  4. Step 4: Convert to percentage: 0.1447 × 100 ≈ 14.5%.
Common mistake: Using linear growth instead of exponential

Concept tested: CAGR in textile output

Published · How this solution was prepared and checked

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