Growth Rates Compounding Problem 3: (a) If GDP p.c. in 2010 was 750 and is growing...

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Growth Rates Compounding Problem 3: (a) If GDP p.c. in 2010 was 750 and is growing...

Growth Rates Compounding Problem 3:
(a) If GDP p.c. in 2010 was 750 and is growing at 4%, in what year will GDP p.c. = 1000?
(b) Suppose the GDP p.c. of a country was 200 in 2008 and is growing at a rate of 5% per annum. What will the GDP per capita be in 2020?

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Answer 1

Answer #1

Answer

a)

PV=GDP p c in 2010=$750

FV=GDP p c in x years=$1000

n=years

r=growth rate =4%

in year 2017.33 the GDP p c will be $1000

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b)

the GDP p c after 12 years, 2020-2008=12 years

the GDP p c in 2020 is $359.17

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Answer 2

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Growth Rates Compounding Problem 3: (a) If GDP p.c. in 2010 was 750 and is growing...

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