If Canadian income grows at a rate of 2 percent per year and French income grows at a rate of 3 percent each year, it will take about 35 years for Canadian income to double, but only 23 years for French income to double.

Question

Quizplus · Accepted Answer

The doubling time formula is T = ln(2)/ln(1+r), where T is the number of years it takes for income to double and r is the rate of growth expressed as a decimal. Using this formula, we find that for Canada, T = ln(2)/ln(1+0.02) ≈ 35 years, while for France, T = ln(2)/ln(1+0.03) ≈ 23 years. Therefore, the statement is true.

If Canadian Income Grows at a Rate of 2 Percent