The wording is not real clear.
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Defnition: r = Level Annual Percentage Increase
2006 - 1895 = 111
110*(1+r)^111 = 70000
In 1895, the winner of a competition was paid $110. In 2006, the winner's prize was $70,000. This is a percent increase in the winner's prize over this period. If the winner's prize increases at the same rate, it will be $ in 2040.