Per capita income is160 times greater in the U.S than in the Congo. per capita grows an average of 3% per year in the U.S. and 6 % per year in the Congo. how many years would it take before per capita in the Congo exceeds that of the United States?
(To simplify the math, suppose at the outset per capita income is $160,000 in the richer country and $1,000 in the poorer country.) I need to know how to figure it out.
(To simplify the math, suppose at the outset per capita income is $160,000 in the richer country and $1,000 in the poorer country.) I need to know how to figure it out.
1 Answer
Explanation:
Suppose that the Congo has per capita income of
Congo's per capita income grows at
Similarly, the US per capita income would rise to
Congo's per capita income would exceed that of the US when
Take the logarithm of both sides:
where we use the fact that
Thus,