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# In 2004, a pound of apples cost \$0.99, while oranges cost \$1.14

In 2004, a pound of apples cost \$0.99, while oranges cost \$1.14. Ten years earlier the price of apples was only \$.72 a pound and that of oranges was \$.55 a pound. What was the annual compound rate of growth in the price of the two fruits? if the same rates of growth persist in the future, what will be the price of apples in 2024? What about the price of oranges?

A bond with face value of \$1,000 has a current yield of 7% and a coupon rate of 8%. What is the bond's price?

#### Solution Preview

In 2004, a pound of apples cost \$0.99, while oranges cost \$1.14. Ten years earlier the price of apples was only \$.72 a pound and that of oranges was \$.55 a pound.
What was the annual compound rate of growth in the price of the two fruits? if the same rates of growth persist in the future,
what will be the price of apples in 2024? What about the price of oranges?

Apple:

CAGR Growth =(0.99/0.72)^(1/10)-1 ((Current year/Base year)^1/Duration
3.24%

Oranges:

CAGR Growth ...

#### Solution Summary

In 2004, a pound of apples cost \$0.99, while oranges cost \$1.14. Ten years earlier the price of apples was only \$.72 a pound and that of oranges was \$.55 a pound. What was the annual compound rate of growth in the price of the two fruits? if the same rates of growth persist in the future, what will be the price of apples in 2024? What about the price of oranges?

\$2.19