Question

National Income (NI) is the sum of the incomes that all individuals in an economy earn in the forms of wages,

interest, rents, and profits. It excludes government transfer payments and is calculated before any deductions are
taken for income taxes. During the period 1994-2004, the NI of Australia grew about 5.2% per year, measured in
2003 U.S. dollars. In 1994, the NI was $4 billion.
Assuming this rate of growth continues, what will the NI of Australia be (in billions) in the year 2020?.
$21.75
O $35.72
$14.946
O $1.00

Answer 1

\simeq 14.94 billion dollars

Explanation:

During the period 1994 - 2004, the 'National Income' ,(NI) of Australia grew about 5.2% per year (measured in 2003 U. S, dollars). In 1994 , the NI of Australia was $ 4 billion.

Now,

(2020 - 1994) = 26

Assuming this rate of growth continues, the NI of Australia in the year 2020 (in billion dollars) will be,

`4 *[((100 + 5.2))/(100)}]^(26)`

=
`4 *[(105.2)/(100)]^(26)`

=\simeq 14.94 billion dollars (answer)