The concepts applied in economic evaluation to address the time-dependent value of money can also be applied to other phenomena, such as growth in traffic volume. The traffic volume on a local highway was 3,510 vehicles per day on an average day in 2012. Based on historical trends, the traffic volume is expected to increase by 3% per year for the foreseeable future. What is the expected traffic volume in 2022?
What will be an ideal response?
Calculate the future value in 10 years
F = 3,510 (F/P, 3%, 10)
Select value from Table 13.3. (F/P, 3%, 10) = 1/0.7441 = 1.3439
F = 3,510 (F/P, 3%, 10) = 3,510 × 1.3439 = 4,717
Therefore, the expected traffic volume in 2022 is 4,717 vehicles per day on
average.
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