Assume that a "leader country" has real gdp per capita of $40,000, whereas a "follower country" has real gdp per capita of $20,0
00. next suppose that the growth of real gdp per capita falls to zero percent in the leader country and rises to 7 percent in the follower country. instructions: enter your answer as a whole number. if these rates continue for long periods of time, how many years will it take for the follower country to catch up to the living standard of the leader country? years.
1 answer:
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Given:
P = $10,000, the principal
t = 40 yers, time duration
r = 8% = 0.08, the interest rate
Assume that
n = 12, monthly compounding.
The value after 40 years is
nt = 12*40 = 480
1 + r/n = 1 + 0.08/12 = 1.0066667
A = 10000*1.0066667⁴⁸⁰ = $242,737.71
Answer: $242,737.71
P = $10,000, the principal
t = 40 yers, time duration
r = 8% = 0.08, the interest rate
Assume that
n = 12, monthly compounding.
The value after 40 years is
nt = 12*40 = 480
1 + r/n = 1 + 0.08/12 = 1.0066667
A = 10000*1.0066667⁴⁸⁰ = $242,737.71
Answer: $242,737.71