In this year, Country A has a real GDP per person that is 4 times greater than that of Country B. country B's growth rate of real GDP per person is 3.5 percent per year. How many years will it take for Country B's real GDP per person to reach the same level that Country A had in this year?

Question

Quizplus · Accepted Answer

Using the rule of 70, which estimates the doubling time of an investment or GDP given a constant annual growth rate, we calculate the time it takes for Country B's GDP per person to quadruple (since it needs to be 4 times its current value to match Country A's current GDP per person). The formula is 70 divided by the growth rate. So, 70 / 3.5 = 20 years to double, and since it needs to double twice (quadruple), it will take 40 years.

In This Year, Country a Has a Real GDP Per