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. According to Solow’s growth model,investment per capita (it ) equals to kt - (1-δ)kt-1where ktis capital per capita at period t and δ is depreciation rate. In addition, saving per capita equals to st= σf(kt) where σ is MPS and f(kt) is income per capita.Using st = it condition the following first order linear difference equation can be constructed as: kt = (1-δ)kt-1 + σf(kt). Given δ = 10%,σ = 20%, f(kt) =100,000 Birr, then find: A) Find the general solution for capital per capital at t years B) Compute the specific solution for capital per capital at the given initial value of 8000 Birr C) Forecast the level of capital per capita after 7 years.

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