Zoe Johnson
Econ 205 T/Th
March 22, 2022
Assignment 6
1.
You are given the following data:
i.
Total Unemployment= 13,000,000
ii.
Adult Population= 260,000,000
iii.
Labor Force= 150,000,000
iv.
Total Population= 330,000,000
v.
Total Cyclical Unemployment= 5,000,000
Use the information above to calculate the unemployment rate and the labor
force participation rate. Show all work.
Unemployment Rate= unemployed people/labor force *100
o
13,000,000/150,000,000= 0.086666667 *100=
8.66666667
Labor Force Participation Rate= Labor Force/Working age
population *100
o
150,000,000/260,000,000= 0.57692308 *100=
57.6923077
2.
Use the rule of 72 to answer each of the following questions. Show all work. (Question is
worth 4 points)
a.
Approximately how long will it take for $1000 to increase to $2000 when
invested at a 6% compounded annual interest rate.
i.
72/6=
12 years
b.
Suppose US real GDP per capita is currently growing at a 1% annualized rate. If
the level of real GDP per capita is currently $55,000, in what year will real GDP
per capita have doubled in size to $110,000?
i.
72/1=
72 years
c.
Suppose you inherited 125,000. IF you were able to invest this at a 9% annual
rate, approximately how long would it take for this amount to increase in size to
1,000,000?
i.
72/9= 8 yrs= 250,000
ii.
8 yrs + 8yrs= 500,000
iii.
16 yrs+8 yrs= 750,000
iv.
24+8 yrs= 1,000,000
v.
Final Answer: 8+8+8+8=
32 yrs
d.
Suppose you inherited $125,000, but the interest rate that it can be invested in is
3%. Approximately how long will it take for this amount to increase to
$1,000,000.
i.
72/3= 24 years= 250,000
ii.
24 years+24 years= 500,000
iii.
24 yrs +24 yrs+24 yrs= 750,000
iv.
24 yrs+24 yrs+24yrs+24 yrs= 1,000,000
v.
Final Answer: 24+24+24+24=
96 yrs