Question

A nation's average annual real GDP growth rate is 2.5 percent. Based on the rule of 70, the approximate number of years that it would take for this nation's real GDP to double is

Answer 1

Answer:

28 years

Explanation:

The formula for calculating the year a country's real will double given a rule of 70 is given as follows:

ND = 70/APGR

Where ND = Number of years to double

APGR = Annual percentage growth rate

The usefulness of the formula is that it can assist in economic and financial estimates and  also to comprehend the compound growth rate characteristics.

In this question, we can calculate the number of years to double as follows:

ND = 70/2.5 = 28 years.

I wish the best.

Answer 2

Answer: 28 years

Explanation: According to finance terms, the rule of 70 approximates the amount of years it takes for an amount to double. In this case the amount is the nation's real GDP rate. Real gross domestic product, or GDP, measures the value of all products and services' value within a country in terms of base year prices. This figure is adjusted for inflation.

To calculate the rule of 70, the following formula is used:

70 ÷ annual growth percentage

=70 ÷ 2.5

=28 years

Therefore it takes 28 years for the real GDP to double.