Question

n 2012, per capita spending on health care in the United States was about $9,000. If this amount increased by 7 percent a year, what would be the amount of per capita spending for health care in 8 years

Answer 1

Answer:

The amount of per capita spending for healthcare in 8 years, would be:

$15,460.

Explanation:

a) Data and Calculations:

Per capita spending on healthcare in the US in 2012 = $9,000

Rate of increase of per capita spending on healthcare = 7%

Period of years for the per capita spending on healthcare = 8 years

Future value can be determined using the Future Factor of 1.718 * $9,000 = $15,462

Using online finance calculator yields:

FV (Future Value) $15,463.68

PV (Present Value) $9,000.00

N (Number of Periods) 8.000

I/Y (Interest Rate) 7.000%

PMT (Periodic Payment) $0.00

Starting Investment $9,000.00

Total Principal $9,000.00

Total Interest $6,463.68