Question

In: Finance

Moldova has a negative population growth. Its population decreased by an annual rate of 1.06% from...

Moldova has a negative population growth. Its population decreased by an annual rate of 1.06% from 2005 to 2010. Assuming that the 2013 population was 3.6 million and thst the population will decline at the 2005-2010 rate in the foreseebale future, set up a difference equatiom that models the population of Moldova beginning in 2013.

Solutions

Expert Solution

Equation for Moldova's population would be    =    3,600,000 X (0.9894)n      ; n- will be the number of years in future.

how derived?

lets assume population at 2013 as 100. the Population for 2014 would be 1.06% lesser than 2013 population

                                =   100     -   (100*1.06%)

                               = 98.94

So the population of Moldova will be 98.94% (or 0.9894 ) of the previous years population.                    

so for the second year- the population will be 98.94% of 98.94    and so on..........

   which is (0.9894)n

since 2013 is the base year- the equation would be = 3,600,000 X (0.9894)n


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