1. My credit card has an APR (annualized percentage rate) of 16.8%. What is the daily interest

rate?

2. My loan shark is asking for $25 in interest for a one-week loan of $1,000. What is that, as

an annual interest rate? (Use 52 weeks per year.)

3. Real output of the United States will likely grow by about 2% over the first half of the

next century. At that rate (of continuous growth), how long will it take for real output to

double? Compare your exact answer with the approximation given by the "Rule of 72."2

4. This morning you invest $10,000 at 6.5% interest that compounds annually. What is the

first date on which you would have at least $15,000? (Quote the answer in terms of years +

days from today. Interest accrues each night, but compounds only annually.)

5.Suppose that 4.6 percent of the earth's forests are cleared each year. How long will it take fewest number of whole years.)

6. World population was about 679 million in the year 1700 and about 954 million in 1800.

1. What was the annual growth rate of population between 1700 and 1800? (Use continuous compounding.)

2. Suppose that the human race began with Adam and Eve and that the annual growth

rate between 1700 and 1800 prevailed in all years prior to 1700. About when must it

have been that Adam and Eve were evicted from the Garden of Eden

7. According to figures compiled by the World Bank, per capita real income in the U.S. was

$15,400 in 1984, while the corresponding figure for Japan was $10,600. Between 1965 and

1984, per capita real income in the U.S. grew at an annual rate of 1.7 percent (using annual

compounding), while the corresponding figure for Japan was 4.7 percent.

1. If these two growth rates remain constant at their 1965-84 levels, in what year will

per capita real income be the same in these two countries? (Again, use annual compounding, and use hundredths of a year.)

2. What will be the common per capita real income of these two countries at that date?

8. The U.S. economy experienced one of its strongest economic expansions during the 1990-2000 period. Some people attribute this economic expansion to the massive introduction of Information Technologies.

Based on your answer to the previous question, and using a Solow diagram, it is possible to say

(a) that the increase in TFP associated to the use of information technologies more than compensated

for the negative impact of higher depreciation, which can help explain why the economy ended

up with a higher GDP

(b) that the increase in GDP attributed to the higher depreciation of capital was further expanded

by the increase in TFP associated to the use of information technologiesr