Final answer:
Using the compound growth formula, the GDP of an economy with a starting GDP of $25 trillion growing at a constant rate of 3% for 18 years would be approximately $42.21 trillion in 2040.
Step-by-step explanation:
To calculate the future GDP of an economy with a constant growth rate, we use the formula: GDP at starting date x (1 + growth rate of GDP)years = GDP at end date. Given that the GDP in 2022 was $25 trillion and the economy has a constant growth rate of 3%, we need to calculate the GDP for the year 2040. This means we will be calculating the GDP growth over 18 years (2040-2022).
The formula becomes: $25 trillion x (1 + 0.03)18. Let's calculate this:
GDP in 2040 = $25 trillion x (1.03)18
To find the value of (1.03)18 we can use a calculator. Raising 1.03 to the power of 18 yields approximately 1.6883. Multiplying this by $25 trillion would give us:
GDP in 2040 = $25 trillion x 1.6883 ≈ $42.21 trillion
Thus, the economy's GDP in 2040 would be expected to be around $42.21 trillion assuming a steady annual growth rate of 3%.