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?

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