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Q1. The equations R = 0.523(1.068)x and S = 0.664(1.055)x can be used to approximate the annual receipts R and spending S of a firm in trillions of dollars for the past two decades. The value x = 0 corresponds to the year 1980. Use these equations to predict the budget surplus in the year 2007.

 Apr 27, 2017

Starting with 1980 being year 0, 2007 will be year 27 (because 2007 - 1980 = 27).

Surplus is found by subtacting spending (S) from receipts (R).


You need to use a calculator to find these two values:  

               R  =  0.523(1.068)27         and        S  =  0.664(1.055)27

and subtract the value for S from the value for R.

 Apr 28, 2017

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