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.
