Suppose that in 1965 Japan had an initial per capita GDP of $12,000 per year and...

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Suppose that in 1965 Japan had an initial per capita GDP of $12,000 per year and...

Suppose that in 1965 Japan had an initial per capita GDP of $12,000 per year and China had a per capita GDP of $5,000. But China is growing at 5 percent per year and Japan is growing at 3 percent per year. ________ would have been richer in 2015 with a per capita GDP of approximately ________.

Japan; $5,000
Japan; $31,500
China; $7,500
China; $60,023
Not enough information is given.

How to get the answer (2)?

business economics

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Answer 1

Answer #1

Option 4. China $60023

Here we need to use compound growth formula = principal*(1+interest rate)^number of year

	Japan	China
1965	12000	5000
Growth rate	3%	5%
2015	$52606.9	$57337
Number of year	50

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Answer 2

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Suppose that in 1965 Japan had an initial per capita GDP of $12,000 per year and...

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Suppose that in 1965 Japan had an initial per capita GDP of $12,000 per year and...