Question

. Suppose, the world’s average (mean) GDP per capita is $9,133 in 2014. If there are roughly 6 billion people in the world, then: a. What is the world’s total GDP? b. If about 20 percent of the world’s population produces 50 percent of the world’s total GDP. How much GDP does the top 20 percent produce? c. What is the average GDP per capita of the most productive 20 percent of the world’s population? (Hint: 20% of 6 billion people equals how many people?) 4. Practice with the rule of 70: If you inherit $10,000 this year and you invest your money so that it grows 7% per year, how many years will it take for your investment to be worth $20,000? $40,000? $160,000?

Answer 1

Answer:

• What is the world’s total GDP?  

$54,798,000,000,000  

• How much GDP does the top 20 percent produce?

$27,399,000,000,000  

• c. What is the average GDP per capita of the most productive 20 percent of the world’s population?  

People 20%  1,200,000,000  

GDP/Per Capita $22,833

• 4. Practice with the rule of 70: If you inherit $10,000 this year and you invest your money so that it grows 7% per year, how many years will it take for your investment to be worth $20,000? $40,000? $160,000?

$20,000   10 Years

$40,000   20 Years  

$160,000  41 Years

Explanation:

The total world GDP is calculated by multiplying the GDP/per capita by the total number of people in the world.

GDP/Per Capita $9,133

People  6,000,000,000  

What is the world’s total GDP?  

$54,798,000,000,000  

We know that 20% of the world's population produces 50% of total GDP, to calculate how much it is, we have to divide the total GDP by 2, and that is the total production of 20% of the population.

$27.399.000.000.000  

As we know how much the 50% of GDP is, we need to know now how much 20% of population is, and then we divide 50% of GDP by the 20% of the population to have the GDP/ per capita of the top 20%.

People 20%  1.200.000.000  

GDP/Per Capita $22.833

Applying the 70's rule, we can find how much time we have to invest the money to get the result we want.

Investment    Future Value       Years        Objective

$10,000   $19,672            10      $20,000  

To get $20,000 from $10,000 the rule of 70 indicates we need 10 years, 70/7 = 10 Years.

$10,000   $38,697           20    $40,000  

To get $40,000 from $10,000 the rule of 70 indicates we need 20 years, 70/7*2 = 20 Years.

$10,000   $160,227         41      $160,000

To get $160,000 from $10,000 the rule of 70 indicates we need 41 years, 70/7*4+1 = 41 Years.