There are two countries on a peninsula. The first has a real GDP per capita annual growth rate of 2% and its neighbor to the south has an annual growth rate of 5%. How much sooner will the country in the south double its GDP per capita than its neighbor in the north?

A) 21 years

B) 15 years

C) 10 years

D) 5 years

Question

Tyree Frederick

Business

4 November, 15:52

There are two countries on a peninsula. The first has a real GDP per capita annual growth rate of 2% and its neighbor to the south has an annual growth rate of 5%. How much sooner will the country in the south double its GDP per capita than its neighbor in the north?

A) 21 years

B) 15 years

C) 10 years

D) 5 years

+1

Answers (2)

Know the Answer?

Luciana Ruiz · Answer 1

A. 21 years

Explanation:

Using the rule of 70

Time it will take the first to double = 70/growth rate

= 70/2

= 35 years.

Applying the same principle

Time it will take the country to the south to double = 70/growth rate

= 70/5

= 14 years.

Thus, the country to the south would double GDP per capita than neighbor in the north in

35 years - 14 years

= 21 years

Trent Harrell · Answer 2

A

Explanation:

Growth rate is defined as the level at which a variable grow over a period of time.

Workings

Applying rule 70

First country growth = 2%

T = 70/2 = 35

Second country growth rate is 5%

T = 70/5

=14

If the first country doubles at 35 years and the second at 14 years,

How much sooner = the difference between the time it takes the two countries to double their GDP.

=35-14 = 21 years