GDP per capita in the United States was approximately $55,000 in 2015. Use the growth formula to answer the following questions:
(a) What will it be in the year 2020 if GDP per capita grows each year by 0 percent?
(b) What will it be in the year 2020 if GDP per capita grows each year by 2 percent?
Growth formula:
(Future value) = (present value) × (1 + r)t
Present value = this year's GDP per capita
Future value = GDP per capita in the future
r = the rate of increase = % growth per year
t = number of years of growth