Is the GDP of country X higher than Country Y?
i. GDP’s of X and Y has been increasing at a compounded annual growth rate of 5% and 6% over he past 5 years
ii. 5 yrs ago GDP of X was 1.2 times Y

• Yes:
  The question is asking that
  Is
  ((((((1.2 y) × 1.05) 1.05) 1.05) 1.05) 1.05) > ((((((y) × 1.06) 1.06) 1.06) 1.06) 1.06)
  Or not ?
  Yes it is .
• 6 years agoHelpfull: Yes(4) No(6)
• Let 5 years ago, GDP of Y was 10000 and GDP of country X was 12000.
  
  After 5 years,
  
  GDP of Y = P (1+r/100)T (we are using here the formula for compound interest)
  
  GDP of Y = 10000 (1+ 6/100)5
  
  = 10000 × 1.06 × 1.06 × 1.06 × 1.06 × 1.06
  
  = 13382.25
  
  After 5 years
  
  GDP of X = 12000 (1 + 5/100)5
  
  = 12000 × 1.05 × 1.05 × 1.05 × 1.05 × 1.05
  
  = 15315.37
  
  Hence, even after 5 years, GDP of X is more than that of Y
• 5 years agoHelpfull: Yes(2) No(0)
• solving both the equation 1.53 > 1.33 so X is always higher than Y
• 5 years agoHelpfull: Yes(0) No(0)