The average annual growth rate of industrial production during the Second Five-Year Plan (1956‑1961) was $4.5\%$. If the industrial production index was $100$ in 1956, what was the index at the end of 1961?

Step-by-step solution

1. Use the compound growth formula: $\text{Final Index}=\text{Initial Index}\times (1+r{)}^n$ where $r=0.045$ and $n=5$.
2. Calculate $(1+0.045{)}^5=1.045^5\approx 1.247$ (using successive multiplication).
3. Multiply the initial index by this factor: $100\times 1.247\approx 124.7$.
4. Round to the nearest whole number: $\approx 125$.

Concept tested: Compound growth of industrial output

Published 1 October 2026 · How this solution was prepared and checked