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Skill-1 Knowing the Terminology

There can be various economic or non-economic terms like CAGR, inflation etc., involved in the data-set, and it is a prerequisite to have a good understanding of these terms.
If the production of wheat in 2004 was 100 million tonnes and in 2007 it was 133 million tonnes, then find the
  1. Percentage Growth,
  2. SAGR,
  3. CAGR.
(A) Percentage Growth = [Growth/Initial value] × 100 = 33%
(B) SAGR (Simple Annual Growth Rate)–It is the average growth rate over the given period. It is calculated by dividing the growth percentage by the number of years involved. In the above case, SAGR = 33/3 = 11%
(C) CAGR (Compounded Annual Growth Rate)–It is the year to year growth rate over the given period. To calculate this, we take the help of the fundamentals of compound interest. We take the final value as the amount after the given period and the initial value as the principal.
In the above case,
Description: 48736.png
Hence, r = 10% (approx.)

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