Question

RGDP in the United States has grown at an average annual rate of 3% in the last couple of decades. If the RGDP annual growth rate were to increase at 7%, calculate how many years earlier will it take the U.S. to double its RGDP when comparing a 7% growth rate to a 3% growth rate.

Answer 1

The 7% rate doubles the GDP 13 years earlier than a 3% growth rate

Step-by-step explanation:

We are asked at which time the 7% rate and the 3% doubles the principal and calculate the diference:

`Principal \: (1+ r)^(time) = Amount`

Principal 1

time ?

rate 0.03 or 0.07

`1(1+ 0.03)^(?) = 2`

to solve this we use logarithmics properties:

log2/log1.03 = 23.44977225

`1(1+ 0.07)^(?) = 2`

log2/log1.07 = 10.24476835

23..44977225-10.24476835 = 13.2050039