Question

Scenario: Growth Rates in Two Countries India is growing at a rate of 9% per year, and its real GDP per capita is about $3,500, while the United States is growing at a rate of 3% per year, and its real GDP per capita is about $47,000. (Scenario: Growth Rates in Two Countries) Look at the scenario Growth Rates in Two Countries. How long will it take the United States to double its real GDP per capita?

Answer 1

23,33 years.

Step-by-step explanation:

We can use the rule of 70 to calculate what the value of a variable might be in the future(taking into consideration that it is an estimate). This rule is pretty efective to determine the amount of years that take a variable to double.

The rule of 70 is representated in this formula:

`Number of years to double=(70)/(Annual Rate of Growth)`

The annual rate of Growth is 3%

We replace:

`Number of years to double=(70)/(3)`

`Number of years to double=23,33`

Note: In the formula we need to put the percentage not divided by 100 but complete, so we put 3 instead of 0.03 for the formula to work.

At a constant growing rate of 3% per year, the United States would rake 23,33 years to double its real GDP per capita.