Consider an economy in which the average annual growth rate of output per worker rises from 3.0% during the period from 1965 to 1985 to a rate of 5.5% from 1986 to the present. This has led to talk of a new Economy and of sustained higher growth in the future than in the past.

At the old rate (3% growth per year) how much would output per worker have grown-relative to today's level- over 12 years?

Question

Consider an economy in which the average annual growth rate of output per worker rises from 3.0% during the period from 1965 to 1985 to a rate of 5.5% from 1986 to the present. This has led to talk of a new Economy and of sustained higher growth in the future than in the past.

At the old rate (3% growth per year) how much would output per worker have grown-relative to today's level- over 12 years?

anonymous · Answer

I heard it is similar with compound interests formula. but I dont know how to use it.

anonymous · Answer

k, I don't quite understand it though.