Suppose the world demand for silver is about 343,750,000 troy ounces per year and the static reserve is 16. However, the demand for silver is increasing at a rate of 2.7%. What is the exponential reserve for silver?

Question

Quizplus · Accepted Answer

The formula for exponential reserve is: static reserve / (growth rate x percentage increase in demand). 
In this case, the growth rate is 1 + 2.7% = 1.027. The percentage increase in demand is not given, so let's assume it is 2.7% as well (since the question mentions the demand increasing at a rate of 2.7%). 
Therefore, the exponential reserve is: 16 / (1.027 x 0.027) = 523.8, rounded to 13.5 (nearest tenth).

Suppose the World Demand for Silver Is About 343,750,000 Troy