Since 2006, the amount of money spent at restaurants in a certain country has increased at a rate of 8% each year. In 2006, about $340 billion was spent at restaurants. If the trend continues, about how much will be spent at restaurants in 2018?
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Part 1
About $
enter your response here billion will be spent at restaurants in 2018 if the trend continues.
(Round to the nearest whole number as needed.)
To calculate the amount of money that will be spent at restaurants in 2018, we need to find the value after 12 years of a compound interest rate of 8% per year. (2006 to 2018 is a span of 12 years.)
Using the compound interest formula, we can calculate the final value:
Final Value = Initial Value * (1 + interest rate)^number of years
Initial Value = $340 billion
Interest Rate = 8% = 0.08
Number of years = 12
Final Value = 340 * (1 + 0.08)^12
Final Value ≈ 340 * (1.08)^12
Final Value ≈ 340 * 2.44140625
Final Value ≈ 829.765625
Rounded to the nearest whole number, about $830 billion will be spent at restaurants in 2018 if the trend continues.