a. U.S labor productivity in 2035 would be $206,800 per worker.
b. U.S labor productivity in 2035 would be $68,100 per worker.
c. Labor productivity per worker in 2035 with the higher growth rate is 3.04
a. Calculation to determine what the U.S labor productivity in 2035 would be $ per worker assuming productivity grows by 3.7 percent per year
Given:
Labor Productivity in 2015 = $100,000
Growth rate = 3.7%pa or 0.037
Using this formula
Future value = Present value*(1+Growth rate)^Number of years
Let plug in the formula
2035 labor productivity per worker=100,000(1 + 0.037)^20
2035 labor productivity per worker= $206,811.71
2035 labor productivity per worker= $206,800
( rounded to nearest $100)
b.Calculation to determine what the U.S labor productivity in 2035 would be $ per worker assuming productivity falls to 1.9 percent per year
Given:
Labor Productivity in 2015 = $100,000
Growth rate = -1.9%pa or -0.019
Using this formula
Future value = Present value*(1+Growth rate)^Number of years
Let plug in the formula
2035 labor productivity per worker= 100,000(1-0.019)^20
2035 labor productivity per worker= $68,136.55
2035 labor productivity per worker= $ 68,100
( rounded to nearest $100)
c. Calculation to determine How much larger would labor productivity per worker be in 2035 with the higher growth rate
2035 labor productivity per worker=($206,811.711/$68,136.55121)
2035 labor productivity per worker= 3.04 times
Inconclusion:
a. U.S labor productivity in 2035 would be $206,800 per worker.
b. U.S labor productivity in 2035 would be $68,100 per worker.
c. Labor productivity per worker in 2035 with the higher growth rate is 3.04
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