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wo​ economies, Hare and​ Tortoise, each start with a real GDP per person of ​$1 comma 000 in 1950. Real GDP per person grows 4​% per year in Hare and 2​% per year in Tortoise. After 70​ years, in year​ 2020, what will be real GDP per person in each​ economy?

Respuesta :

sebastiansierraocm

Answer:

Hare 2020 Real GDP per person = $15,572

Tortoise 2020 Real GDP per person = $3.999

Explanation:

To find the answer, we use the future value formula:

FV = PV (1 + i)^n

Where:

  • FV = Future Value
  • PV = Present Value
  • i = growth rate
  • n = number of years

For Hare:

FV = 1,000 (1 + 0.04)^70

     = 15,572

For Tortoise:

FV = 1,000 (1 + 0.02)^70

     = 3.999

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