At an annual growth rate of 14 percent, real GDP will double inabout:a) 11½...

At an annual growth rate of 14 percent, real GDP will double in about:

a) 11½ years

b) 10 years

c) 13½ years

d) 5 years

Expert Solution

The real GDP will double in n = log2/ log (1+r/100)

Here r = 14

So n = log 2 / log 1.14

On solving n = 5.29

So the real GDP will double in approximately 5 years.

Another easier way to find out n = 72/ r

n = 72/14 = 5,14

This also tells that the real GDP will double in approximately 5 years.

Hence, the correct option is d) 5 years

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Rahul Sunny answered 2 years ago

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