Problem:
Solution:
a) The 10-year growth factor is $ \frac{1.307}{0.961} = 1.3600 ... $
b) The 1-year growth factor is $ r = 1.36^{\frac{1}{10}} = 1.0312... $
Therefore the function is $ f(t) = 0.961 \times r^t $.
ci) $ f(6) $
cii) $ f(3)= $
ciii) $ f(8)= $
d) Here we need to solve an equation
$ f(t) = 1.15 $.
Expanding, we have $ 0.961 \times r^t = 1.15 $, taking logarithm we get the answer $ t = 5.8 $.
Since we want the year, it would be 1996.
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