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13 March, 07:56

Suppose that real GDP per capita in the United States is $49,000. If the long-term growth rate of real GDP per capita is 1.6% per year, how many years will it take for real GDP per capita to reach $98,000?

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  1. 13 March, 08:22
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    The correct answer is 45 years.

    Explanation:

    According to the scenario, the computation of the given data are as follows:

    GDP per capita = $49,000

    Growth rate = 1.6%

    Required GDP = $98,000

    So, we can calculate the time period by using the Rule 72 formula:

    Rate * Time period = 72

    So, by putting the value,

    1.6 * Time period = 72

    Time period = 72 : 1.6

    Time period = 45 Years
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