#6 please economic growth rates for tn s 2008, 200of the year specified, data .
ID: 2790934 • Letter: #
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#6 please
economic growth rates for tn s 2008, 200of the year specified, data . Use the data in the table below t the United Ste at all Nominal GDP (billions of 5% GDP Population 2 % Date current 5) deflator 2007 $14,061.8 2008 $14,369.1 2009 $14,119.0 2010 $14,660.4 106.30 108.62 109.61 110.66 1.01% 0.93% 0.87% 0.90% The rule of 70 applies in any growth rate a cation. Let's say you have $1,000 in sai and you have three alternatives:g e ·a savings account earning 1% interest . a U.S. Treasury bond earning 3% interest year year interest per year a stock market mutual fund earning 8% Approximately how long would it take to dou- ble your savings in each of the three accounts? 6. Assume that you plan to retire in 40 years and are evaluating the three different accounts listed in question 5. How much would your $1,000 be worth in 40 years under each of the three alternatives? . Economic growth is a very particular concept in economics. The term "economic growth"is not always used correctly in media reports. a. Define economic crouthExplanation / Answer
Question 6:
Assume that you retire after 40 years and you have $1000 in savings and you have three alternatives for investing these funds. Worth of these savings after 40 years
We can use following formula to calculate the future value (FV) or worth of the investment
FV = PV * (1+i) ^n
Where,
Present Value PV = $1000
Future value of investment FV=?
Annual interest rate i =1%
Time period n = 40 years
Therefore,
FV = $1000 * (1+1 %) ^40
= $1,488.86
Future worth of investment after 40 years will be $1,488.86
We can use following formula to calculate the future value (FV) or worth of the investment
FV = PV * (1+i) ^n
Where,
Present Value PV = $1000
Future value of investment FV=?
Annual interest rate i =3%
Time period n = 40 years
Therefore,
FV = $1000 * (1+3%) ^40
= $3,262.04
Future worth of investment after 40 years will be $3,262.04
We can use following formula to calculate the future value (FV) or worth of the investment
FV = PV * (1+i) ^n
Where,
Present Value PV = $1000
Future value of investment FV=?
Annual interest rate i =8%
Time period n = 40 years
Therefore,
FV = $1000 * (1+8%) ^40
= $21,724.52
Future worth of investment after 40 years will be $21,724.52
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