Question

From 2009 to 2010, per capita real gross domestic product (GDP) in the United States grew by 1.8%. At that rate, according to the Rule of 70, in roughly how many years will per capita real GDP double?

Answer 1

By applying the Rule of 72, we determine that at a growth rate of 1.8%, it will take approximately 40 years for the United States' per capita real GDP to double.

Step-by-step explanation:

The question asks about the Rule of 72, an approximation tool used to quickly determine the doubling time of an investment or in this case, per capita real GDP given a fixed annual growth rate. The rule states that if you divide the number 72 by the annual growth rate, the result will give you the approximate number of years it will take for the initial amount to double.

Since the per capita real GDP in the United States grew by 1.8% from 2009 to 2010, we can apply the Rule of 72 to find out the doubling time:

Number of years to double = 72 / Annual Growth Rate
Number of years to double = 72 / 1.8
Number of years to double = 40 years

Therefore, at a 1.8% growth rate, it will take approximately 40 years for the United States' per capita real GDP to double.