3% growth, which is approximately the same as the second, more complicated method. If you need a rough

approximation, use the first method. If you need accuracy, use the second method.

A few things to remember: A positive growth rate means the quantity is growing. A smaller growth rate means

the quantity is growing more slowly. A larger growth rate means the quantity is growing more quickly. A

negative growth rate means the quantity is decreasing.

The same change over times yields a smaller growth rate. If you got a $2 raise each year, in the first year the

growth rate would be $2/$10 = 20%, as shown above. But in the second year, the growth rate would be $2/$12 =

0.167 or 16.7% growth. In the third year, the same $2 raise would correspond to a $2/$14 = 14.2%. The moral

of the story is this: To keep the growth rate the same, the change must increase each period.

Displaying Data Graphically and Interpreting the Graph
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