Answer:
It will take approximately 36 Years to Poorland to catch up to Richland.
Explanation:
Given data:
The GDP increase in Poorland per year = 1 %
The GDP increase in Richland per year = 3 %
Calculations:
Step 1: For Richland:
The formula for calculating the per year GDP increase for Richland is:
GDP = 10,000 + (10,000 x (1/100)) ---- (1)
GDP for first Year = 10,100$
GDP for second Year = 10,201 $
Similarly using the formula (1) we calculated the values for 10 and 20 years
GDP for 10th Year = 11046.2$
GDP for 20th Year = 12201.9$
Step 2: For Poorland:
The formula for calculating the per year GDP increase for Poorland is:
GDP = 5,000 + (5,000 x (3/100)) ---- (1)
GDP for first Year = 5,150$
GDP for second Year = 5,304.5 $
Similarly using the formula (1) we calculated the values for 10 and 20 years
GDP for 10th Year = 6719.6$
GDP for 20th Year = 9030.6$
Step 3: When will Poorland catch up to Richland:
By calculating values using the above formulas, we have found that for 38th year, Poorland will catch upto Richland and will have more GDP.
Poorland GDP for 36th Year = 14491.4$
Richland GDP for 36th Year = 14307.7$
