Chapter 9 Homework Animations Slide Show Review View alibri (Body) Convert to Sm

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Chapter 9 Homework Animations Slide Show Review View alibri (Body) Convert to SmartÄrt @ Help Me Solve This EQuestion Help Suppose that we round the rate of growth of per capita reai GDP Average Annual Rate of Growth of Per Capta Real GDP in the experienced in the European Union between 1961-1990 in the gure to the right to the nearest full percentage point. Then based on the information in the table to the right, by what percentage would per capita real GDP have increased between 1990 and 2020 t the economic growth rate will have remained at this rounded level? 1981-1 1991-200 2001-201 When we talk about growth rates, we are talking about compounding. The table shows how $1 compounded annualy grows at dfferent interest rates. For example, a dollar compounded annualy at an interest rate g% would be worth $ 1.34 at the end of 5 years. (Enter your respor rounded to two decimial places) Source: World Economic Outlook Database, International Monetary would per capita real GDP have increased between 1990 and 2020 f the economic growth rate will have remained at this rounded level? One Dollar Compounded Annually Over Time at Different Interest Rates 4% Number 13% of Years 5% 10% 6% 8% 20 When we talk about growth rates, we are talking about compounding The table shows how $1 compounded annualy grows at different interest rates For example, a dolar compounded1 anualy at an interest rate of 6% would be worth S 134 at the end 21106 of 5 years. (Enter your response rounded to two decimal places) 1.20 1.44 3 109 1.121.16 1.19 126 133 1.73 4 1.13 1.17 122 1.26 36 1462.07 5 1.16 122128 1.34 47 161 2.49 1.19 127134 1.41 1591.77 2.99 3.58 8 1.27 137 1.48 159 1.85214 4.30 9 1.30 142155 168 200 2355.16 10 1.34 148163 1.79 2 162.596.19 20 1.81 2.19265 320 46667238 30 30 243 3244.32 574 10.00 17.40237.00 1.08 110 1.12 1.17 1.21 From the figure, the rate of growth of per capita real GDP experienced in the European Union between 1981-1990rounded6 tote nearest ful percentage por.s 6% (Enter your response as a whole number) 71123 132 141 1.50 1.71 194 lfthe economic growth rate wil have remained at6%between 1990 and 2020, then from the table, per capita real GOP wil have ncreased by 47% (Enter your response as a whole number) Comment in other words, each dollar of per capita real GDP in 1981-1990 will have been worth $5.74 in 2020 40 3 28 4.80 70410.30 2170 4530 1.470.0 5014.38 711 50 1840 6.90 117009100.00 es

Explanation / Answer

we have given that $1 to be compounded annually for 30 years (1990-2020)

formula for compound interest:

A = P (1+r)n

Where,

A is total amount

P is principal

r is interest rate

n in no. of years

A = 1 (1+0.06)30

Solve this, we will get

A = 5.74

It means each dollar of per capita real GDP in 1990 will worth 5.74 in 2020.

Interest earned = A - P

Interest earned = 5.74 - 1

Interest earned = 4.74

So, from 1990 to 2020, each dollar will increase by $4.74 or per capita real GDP will increase by 474%.

474% of $1

(474/100)*1

4.74*1

$4.74

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