How much larger country bs economy than country as economy


Problem

Two countries start with equal GDPs. The economy of Country A grows at an annual rate of 3 percent, whereas the economy of Country B grows at an annual rate of 4 percent. After 25 years, how much larger is Country B's economy than Country A's economy? Why is the answer not 25 percent?

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Macroeconomics: How much larger country bs economy than country as economy
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