Question

Since 2004, the amount of money spent at restaurants in a certain country has increased at a rate of 7% each year. In 2004, about $360 billion was spent at restaurants. If the trend continues, about how much will be spent at restaurants in 2012?

Answer 1

To find out how much will be spent at restaurants in 2012, we need to calculate the increase in spending each year.

Since the money spent at restaurants increases at a rate of 7% each year, the total spending in 2012 can be calculated as follows:

In 2004, the spending was $360 billion.
In 2005, the spending increased by 7%, so the new spending was $360 billion + 0.07 * $360 billion = $360 billion + $25.2 billion = $385.2 billion.
In 2006, the spending increased by 7% again, so the new spending was $385.2 billion + 0.07 * $385.2 billion = $385.2 billion + $26.964 billion = $412.164 billion.
And so on...

We can continue this calculation for each year until we reach 2012:

In 2004: $360 billion
In 2005: $360 billion + $25.2 billion = $385.2 billion
In 2006: $385.2 billion + $26.964 billion = $412.164 billion
In 2007: $412.164 billion + $28.84908 billion = $441.01308 billion
In 2008: $441.01308 billion + $30.8709146 billion = $471.8849946 billion
In 2009: $471.8849946 billion + $33.03214962 billion = $504.91714422 billion
In 2010: $504.91714422 billion + $35.346201096 billion = $540.263345316 billion
In 2011: $540.263345316 billion + $37.82143422512 billion = $578.08477954112 billion
And finally, in 2012: $578.08477954112 billion + $40.4670345708872 billion = $618.5518141110072 billion.

Therefore, about $618.552 billion will be spent at restaurants in 2012, when the trend continues.