If it is not stated otherwise, the annual rate of growth shows how a quantity increased/decreased comparing to a PREVIOUS year, i.e. for 2000 it shows how a quantity in 2000 changed comparing to 1999, in 2001 - comparing to 2000, etc.

As you've mentioned, the difference between the

growth RATE in 99' and the

growth RATE in 00' is in fact 4% – 2% = 2%. But it doesn't give us anything in this question.

While the difference between the

REVENUE in 99' and the

REVENUE in 00' is 4% of the REVENUE in 99' (as the graph shows). This allows us to compare the revenues, not the growth rates.

If the REVENUE in 1999 was

*S*, then in 2000 the REVENUE was 1.04 ×

*S*, in 2001 the REVENUE was 1.05 × 1.04 ×

*S*.

So the difference between the REVENUE in 99' and 01' is:

1.05 × 1.04 ×

*S* –

*S* = 1,092 ×

*S*, or 9.2% of the REVENUE in 99'.

The last paragraph should give you the full feeling of what the difference between the annual growth rate and growth rate compared to a certain year is.

If we rewrite the grow rate by year, COMPARING TO the revenue in 99' the numbers will be:

If we rewrite the grow rate by year, COMPARING TO the revenue in 00' the numbers will be: