The national income of a company in 1964 was 30 million dollars. It grows at 4% per annum. Using base unit of 10 million dollars per annum, compute the national income of the company for four years; 1964, 1965,1966 and 1984.
1964 ----> 30
1965 ----> 30(1.04) = ...
1966 ----≥ 30(1.04)^2 = ...
1984 ----> 30(1.04)^20 = ...
I will let you do whatever with these results.
I assume that you did the calculations, e.g for
1984 it would be appr. 65.73 million
"Using base unit of 10 million dollars per annum.."
I interpret that to mean: round to the nearest 10 million,
so our 65.73 million would round to 70 million
do the same for the other two.
Thanks Sir(mathhelper). Pls I will love that you help me solve further because that's the aspect I'm getting confused
Thanks! Thanks!!
To compute the national income of the company for the given years, we need to calculate the growth rate for each year and apply it to the initial income. Let's break down the calculation for each year:
1. 1964: The given national income for this year is 30 million dollars. Since no growth has occurred yet, we can directly use this amount.
2. 1965: To calculate the national income for this year, we need to apply the growth rate of 4%. Let's break down the calculation:
- Growth rate = 4% = 4/100 = 0.04
- Increase in income = 30 million dollars × 0.04 = 1.2 million dollars
- National income in 1965 = 30 million dollars + 1.2 million dollars = 31.2 million dollars
3. 1966: Similar to the previous year, we apply the 4% growth rate on the previous year's national income:
- Increase in income = 31.2 million dollars × 0.04 = 1.248 million dollars
- National income in 1966 = 31.2 million dollars + 1.248 million dollars = 32.448 million dollars
4. 1984: To calculate the national income for this year, we need to compound the growth rate for 19 years. Here's how to calculate it:
- Number of years = 1984 - 1965 = 19 years
- Growth rate for 19 years = (1 + 0.04)^19 - 1
- National income in 1984 = 31.2 million dollars x (1 + 0.04)^19
Calculating the final value requires a calculator or a spreadsheet since it involves raising a number to a power, but it follows the same logic as the previous calculations.