Question

If prices increase at a monthly rate of 12%, by what percentage do they increase in a year?

Answer 1

Price rise percenage in a year is `289.6%`

Explanation:

Let initial price is `100` , Price after `1` month is `112 :.`common ratio is `r= 112/100 = 1.12`, This is a geometric progression of which first term is `112`

After 12 months the price will be `a_1*r^(n-1) = 112 * (1.12)^(12-1)= 112*1.12^11 ~~ 389 .60(2dp)`

So yearly price rise is `389.60-100=289.60`

Hence yearly price rise percenage is `289.60/100*100=289.6%` [Ans]