If GDP is increasing by 3% per year how long will it take GDP to double? Given the same conditions how long will it take Per Capita GDP to double if the population grows at 2%?

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Solution:

Part 1
If GDP is increasing by 3% per year how long will it take GDP to double?

Let n be the period in years needed to double the GDP at 3% growth rate.
GDP after n years=Current GDP*(1+3%)^n=current GDP*(1.03)^n
Given
GDP after n years/Current GDP=2
Current GDP*(1.03)^n/Current GDP =2
(1.03)^n=2
Take natural log ...

Solution Summary

Solution describes the steps to calculate the time needed to double the GDP and Per Capita GDP.

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