-Refer to the above table. Two countries have per capita real GDPs in 2010 of $5000. If country A has a 4 percent growth rate and Country B a 5 percent growth rate, what will the per capita real GDPs of each be in the year 2060?
A)A: $40,000; B: $60,000
B)A: $35,550; B: $57,500
C)A: $24,000; B: $35,200
D)A: $15,000; B: $30,000

Question

-Refer to the above table. Two countries have per capita real GDPs in 2010 of $5000. If country A has a 4 percent growth rate and Country B a 5 percent growth rate, what will the per capita real GDPs of each be in the year 2060?
A)A: $40,000; B: $60,000 
B)A: $35,550; B: $57,500 
C)A: $24,000; B: $35,200 
D)A: $15,000; B: $30,000

Quizplus · Accepted Answer

Using the formula for compound growth, GDP in 2060 for Country A is $5000*(1.04)^50 ≈ $35,550 and for Country B is $5000*(1.05)^50 ≈ $57,500.

-Refer to the Above Table