Answer:
Real GDP is not the direct indication of happiness, because happiness is dependent on a number of other factors, which when combined can result in a happy life.
Explanation:
Real GDP is defined as the measure of the value of the output of the economy, in the macroeconomics, which reflects the money value of all goods and services produced in a given year. Here the output of the economy is also adjusted for the changes in prices occurring in the year.
According the referred application 3 of the book, it is true that the people of United States have become less happy despite the real GDP rise over the last 30 years. This is because the growth of real GDP is not able to cope up simultaneously with the increased workplace stress, jeopardized married life, traffic congestion, health problems and deterioration of environment.
In conclusion, it can be stated that Money does play an important role in increasing the happiness. However the factor alone is not able to cope up with all the problems and this is true only when all the other factors such as a conducive working environment, happy married life, healthy life are also accompanying more money.
Annual Compound Formula is:
A = P( 1 + r/n) ^nt
Where:
A is the future value of the investment
P is the principal investment
r is the annual interest rate
<span>n is the number of
interest compounded per year</span>
t is the number of years the money is invested
So for the given problem:
P = $10,000
r = 0.0396
n = 2 since it is semi-annual
t = 2 years
Solution:
A = P( 1 + r/n) ^nt
A = $10,000 ( 1 + 0.0396/2) ^ (2)(2)
A = $10000 (1.00815834432633616)
A = $10,815.83 is the amount after two years
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