The following are GDP figures for Country A Year GDP (bn) 2022 $212 2021 $200 If Country A maintains the same growth rate, how long will it take for GDP to reach $424bn?
Question
The following are GDP figures for Country A
Year
GDP (bn)
2022
$212
2021
$200
If Country A maintains the same growth rate, how long will it take for GDP to reach $424bn?
Solution
First, we need to calculate the growth rate from 2021 to 2022.
The formula for growth rate is:
Growth Rate = (Final Value - Initial Value) / Initial Value * 100%
So, the growth rate from 2021 to 2022 is:
Growth Rate = (200bn) / $200bn * 100% = 6%
Next, we need to calculate how long it will take for the GDP to double from 424bn at a growth rate of 6%.
We can use the rule of 70 to estimate this. The rule of 70 is a way to estimate the number of years it takes for a certain variable to double. The formula is:
Number of Years = 70 / Growth Rate
So, the number of years it will take for the GDP to double is:
Number of Years = 70 / 6 = 11.67 years
Therefore, it will take approximately 12 years for the GDP of Country A to reach $424bn if it maintains the same growth rate of 6%.
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