If real GDP per capita in Canada is $8,000, what will real GDP per capita in Canada be after 5 years if real GDP per capita grows at an annual rate of 3.2%?
A)$8,520
B)$9,280
C)$9,365
D)$10,560
E)$12,350

Question

Quizplus · Accepted Answer

We can use the formula for exponential growth to solve this problem:

Real GDP per capita in 5 years = $8,000 * (1 + 0.032)^5 
Real GDP per capita in 5 years = $8,000 * 1.177 
Real GDP per capita in 5 years = $9,416

However, we need to round our answer to the nearest dollar, so the best choice is C, which is $9,365.

If Real GDP Per Capita in Canada Is $8,000, What