Richland's real GDP per person is $10,000 and Poorland's real GDP per person is $5,000. However Richland is growing.at

Question

Richland's real GDP per person is $10,000 and Poorland's real GDP per person is $5,000. However Richland is growing.at 1% per year and Poorland is growing at 3% per year. Compare real GDP per person after 20 years and after 40 years. Please enter your answers as numerical responses rounded to the nearest dollar, and do not type out your answer as words, (ie. $13,452 not "Thirteen thousand four hundred fifty-two dollars"). What is Richland's Real GDP after 20 years? VIII What is Richland's Real GDP after 40 years? What is Poorland's Real GDP after 20 years? What is Poorland's Real GDP after 40 years?

Help In Homework · Accepted Answer

Computation of Real GDP per Person after 20 Years and after 40 Years using Future Value Formula: Future Value = Present Value * (1 + Growth Rate)^Number of Years Real GDP per Person in Richland after 20 Years = 10000 * (1 + 1%)^20 = 12,201.90 Real GDP per Person in Richland after 40 Years = 10000 * (1 + 1%)^40 = 14,888.64 Real GDP per Person in Poorland after 20 Years = 5000 * (1 + 3%)^20 = 9,030.56 Real GDP per Person in Poorland after 40 Years = 5000 * (1 + 3%)^40 = 16,310.19

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Richland's real GDP per person is $10,000 and Poorland's real GDP per person is $5,000

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