Chapter 7, Problem 4SCQ

Assume there are two countries: South Korea and the United States. South Korea grows at $\text{4}\%$ and the United States grows at $\text{1}\%$.

For the sake of simplicity, assume they both start from the same fictional income level, $\$\text{1}0,000$.

What will the incomes of the United States and South Korea he in 20 years? By how many multiples will each country’s income grow in 20 years?