If,between 2001 and 2011,the economy's real GDP grew from $20 billion to $40 billion,what was the average annual growth rate in the economy?

Question

Quizplus · Accepted Answer

To calculate the average annual growth rate, we can use the compound annual growth rate (CAGR) formula: 
CAGR = (End Value/Beginning Value)^(1/Number of Years) - 1

Using the given data: 
End Value = $40 billion 
Beginning Value = $20 billion 
Number of Years = 10

CAGR = ($40 billion/$20 billion)^(1/10) - 1 = 7.18%

Therefore, the closest option is B) 7%.

If,between 2001 and 2011,the Economy's Real GDP Grew from $20