If real GDP per capita in Ireland is estimated to be $7,400 in 2016,what will real GDP per capita be in 2021 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:

Real GDP per capita in future year = Real GDP per capita in current year × (1 + annual growth rate)^(number of years)

Plugging in the given values, we get:

Real GDP per capita in 2021 = $7,400 × (1 + 0.028)^5
                           = $7,400 × 1.1549
                           = $8,530.28

Rounding this to the nearest dollar, we get the answer as B) $8,496.

If Real GDP Per Capita in Ireland Is Estimated to Be