Question

Since 2005 , the amount of money spent at restaurants in a certain country has decreased at a rate of 7 % each year . In 2005 , about $ 1450 billion was spent at restaurants . If the trend continues , about how much will be spent at restaurants in 2020 ?

Answer 1

$488.2 billion

Explanation:

A year-on-year decrease of 7% means the multiplier is (1 -7%) = 0.93. After 15 years (from 2005 to 2020), the spending will have been multiplied by that value 15 times, or 0.93^15.

The spending at restaurants in 2020 is modeled to be ...

$1450(0.93^15) ≈ $488.2 . . . billion