The correct answer is A (10.7%). The compound annual growth rate (CAGR) is calculated using the formula:

$g = \left( \frac{FV}{PV} \right)^{\frac{1}{N}} - 1$

where:

• $FV$ is the future value (1.5 times the present value),
• $PV$ is the present value (assumed to be 1 for simplicity),
• $N$ is the number of periods (4 years).

Substituting the values:

$g = (1.5)^{\frac{1}{4}} - 1 \approx 0.10668 \text{ or } 10.7\%$

Option B (11.8%) is incorrect as it uses a logarithmic approach, which is not applicable here. Option C (12.5%) is incorrect as it simply divides the total growth by the number of years, ignoring compounding effects.