Essentials of Economics 10th Edition by Bradley Schiller, Karen Gebhardt

Exercise 3

GDP per capita in the United States was approximately $55,000 in 2015. Use the growth formula to answer the following questions:
(a) What will it be in the year 2020 if GDP per capita grows each year by 0 percent?
(b) What will it be in the year 2020 if GDP per capita grows each year by 2 percent? Growth formula:
( future value) = (present value) × (1 + r) t
present value = this year's GDP per capita
future value = GDP per capita in the future
r = the rate of increase = % growth per year
t = number of years of growth