Question

The average worker in China makes $5,000/year. Wages are keeping up with GDP growth of 7%/year. Assuming a constant growth rate, how long will it take for the average worker in China to be paid $20,000/year?

Answer 1

Answer:

it will take 20.75 year to reach amount $20000

Explanation:

It is given that average worker in China makes $5000 per year

So principal amount P = $5000

It is given that wage are keeping up with a rate of 7%

So rate of interest r = 7 %

We have to find the time in which amount will become $20000 per year

We know that total amount is given by $A=P(1+\frac{r}{100})^n$, here n is time period and r is rate of interest

So $20000=5000(1+\frac{7}{100})^n$

So $4=1.07^n$

Taking log both side

$log4=nlog1.07$

$0.6020=n\times 0.029$

n = 20.75 year

So it will take 20.75 year to reach amount $20000