Question

Since 2005, the amount of money spent at restaurants in a certain country has increased at a rate of 5% each year. In 2004, about 5430 billion was spent at

restaurants. If the trend continues, about how much will be spent at restaurants in 2014?

About 5 billion will be spent at restaurants in 2014 if the trend continues

(Round to the nearest whole number as needed.)

Answer 1

8845 billion

Explanation:

Since exponential growth is given by;

P = a( 1 + r)^t

Where;

P = amount spent after t years

r = exponential growth rate

t = time interval

2004 - 2014 is an interval of 10 years. If 5430 billion was spent in 2004 and the growth rate has been 5% each year, then;

P= 5430 * 10^9(1 + 5/100)^10

P = 8845 * 10^9

P = 8845 billion