Problem
The Consumer Price Index is reported monthly by the U.S. Bureau of Labor Statistics. It reports the change in prices for a market basket of goods from one period to another. The index for 1998 was 166.5. By 2015, it increased to 286.6. What was the geometric mean annual increase for the period? (Round your answer to 2 decimal places.) Geometric mean
Solution
Step 1 ：Calculate the number of years: 2015 - 1998 = 17
Step 2 ：Plug in the values into the formula: Geometric mean = (286.6 / 166.5)^(1 / 17) - 1
Step 3 ：Calculate the expression: Geometric mean ≈ 0.0327
Step 4 ：Round the result to 2 decimal places: Geometric mean ≈ 0.03
Step 5 ：The geometric mean annual increase for the period is approximately \(\boxed{0.03}\)
