Answer:
a)
![500=(1+r)^(40)](https://img.qammunity.org/2020/formulas/mathematics/middle-school/zgdmrzikfgq22yad0giegu7xznd337xyei.png)
b) 16.81%
Explanation:
a)
The general formula for compound growth is:
![F=P(1+r)^t](https://img.qammunity.org/2020/formulas/mathematics/middle-school/2l5txdvbnn6otiepxf4q78p59bxjtd8j5b.png)
Where
F is the future amount (5000 in our case)
P is the present amount (10 here)
r is the rate of growth (we don't know that yet)
t is the time in years (that would be 1980 - 1940 = 40)
So, the formula becomes:
![F=P(1+r)^t\\5000=10(1+r)^(40)\\500=(1+r)^(40)](https://img.qammunity.org/2020/formulas/mathematics/middle-school/iwb1uk9652raiq9ejjbscaezbc6prorsyi.png)
b)
We need to find the growth rate (annual percentage increase). So we have to solve for "r" in the equation found in part (a).
![500=(1+r)^(40)\\\sqrt[40]{500} =\sqrt[40]{(1+r)^(40)} \\1.1681=1+r\\r = 1.1681 - 1 = 0.1681](https://img.qammunity.org/2020/formulas/mathematics/middle-school/zncw9sojtk6ers1pqg6n1hluyuvhjxzcx5.png)
To get percentage, we multiply by 100:
0.1681 * 100 = 16.81%