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.
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.