Question

Assuming a country's economy maintains an 8% rate of growth, young adults starting at age 20 would see the average standard of living in their country more than double by the time they had reached age __________.

Answer 1

The formula for exponential growth rate is:

A = Ao e^(k t)

where A is the final standard of living, Ao is the initial, k is the growth rate constant in decimal = 0.08, t is time elapsed

So we will find t at A/Ao = 2

A/Ao = e^(k t)

2 = e^( 0.08 t)

t = 8.66 ~ since more than therefore 9

So by the time they reached age 29