If real GDP per capita in Ireland is estimated to be $7,400 in 2018,what will real GDP per capita be in 2023 if real GDP per capita grows at an annual rate of 2.8%?
A)$7,607
B)$8,496
C)$9,472
D)$20,720

Question

Quizplus · Accepted Answer

We can use the formula:

Future value = Present value x (1 + growth rate)^n

where:
Present value = $7,400
Growth rate = 2.8% per year
n = number of years = 5 (from 2018 to 2023)

Plugging in the values, we get:

Future value = $7,400 x (1 + 0.028)^5
Future value = $7,400 x 1.151
Future value = $8,496

Therefore, the answer is B) $8,496.

If Real GDP Per Capita in Ireland Is Estimated to Be