Question

If a company earned $100,000 in 1980 and $400,000 in 2010, what was its average rate of change per year?

Answer 1

The average rate of change is the slope of the secant line or just line that intersects `2` points on a graph.

If you think of the information as coordinates on a graph the points would be `(1980,10000)` and `(2010,400000).`

`(x_1,y_1)->(1980,10000)`
`(x_2,y_2)->(2010,40000)`

Average rate of change =

`(y_2-y_1)/(x_2-x_1)=(400000-100000)/(2010-1980)=300000/30=30000/3=10000`

The average rate of change per year is $10000.