Question

An economy starts off with a GDP per capita of $972. How large will the GDP per capita be if it grows at an annual rate of 4.2% for 18 years? Round your answer to the nearest whole number (no digits to the right of the decimal point).

Answer 1

Answer:

The GDP will be $2070

Explanation:

To calculate this, we use the formula:

$P=P_oe^{rt}$

Where r is the rate and t is the time it takes P_o to grow to P

$\begin{gathered} P=972e^{(18\times0.042)} \\ =972e^{0.756} \\ =2070 \end{gathered}$