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After 2 years the population has increased by 16.64%.

Explanation:

Say you start with P people. In 1 year you have 1.08P people. In 2 years there are 1.08(1.08P) people=1.1664P people.

The increase is 1.1664P-P=.1664P

The rate of increase=.1664P/P=.1664=16.64%

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