EXPLANATION
Given that 1.113 is the 2-unit growth factor:
The percent growth over previous n unit time periods is called n-unit growth.Thus, if the n-unit growth in percent (xn%) is given, we can find average 1-unit growth in percent (x1%) as follows:
[tex]Unit-\text{Growth factor:}\cdot(1+\frac{x_n}{100})=(1+\frac{x_1}{100})^n[/tex]In this case, we need to replace
[tex]Unit-\text{Growth factor:}\cdot(1+\frac{x_n}{100})=(1+\frac{1.113}{100})^2[/tex][tex]Unit-\text{Growth factor:}\cdot(1+\frac{x_n}{100})=1.02238[/tex]Subtracting by 1:
[tex]\frac{x_n}{100}=1.02238-1[/tex]Multiplying both sides by 100:
[tex]x_n=(1.02238-1)\cdot100[/tex][tex]x_n=0.0223838\cdot100[/tex]Multiplying terms:
[tex]x_n=2.23[/tex]The answer is 2.23%.
