Question

if per capita spending for health care was about $10,000 and if this amount increased by 8 percent a year, what would be the amount of per capita spending for health care in 8 years? use

Answer 1

The per capita spending for health care in 8 years, with an 8 percent annual increase from $10,000, would be $18,509.30, calculated using the compound interest formula.

Step-by-step explanation:

To calculate the amount of per capita spending for health care in 8 years with an annual increase of 8 percent, we use the formula for compound interest: Future Value = Present Value x (1 + rate)^number of periods. Here, the present value is $10,000, the rate is 0.08 (8 percent), and the number of periods is 8 years.

Future Value = $10,000 x (1 + 0.08)^8

Future Value = $10,000 x (1.08)^8

Future Value = $10,000 x 1.85093

Future Value = $18,509.30

Therefore, the per capita spending for health care in 8 years would be $18,509.30.