If GDP is currently $13 trillion and is growing at a rate of 2.6% per year, how long will it take GDP to reach $26 trillion?

Question

Quizplus · Accepted Answer

We can use the formula for compound interest to solve this problem:

A = P(1 + r)^t

where A is the ending amount, P is the beginning amount, r is the interest rate (expressed as a decimal), and t is the time.

In this case, we want to find t, so we can rearrange the formula:

t = log(A/P) / log(1 + r)

We know that P = $13 trillion, A = $26 trillion, and r = 0.026 (2.6% expressed as a decimal). Plugging in these values, we get:

t = log($26/$13) / log(1 + 0.026) ≈ 26.6 years

So it will take about 27 years for GDP to reach $26 trillion. Therefore, the best choice is C.

If GDP Is Currently $13 Trillion and Is Growing at a Rate