GDP in a country grew from $10 billion to $14 billion over the span of five years. The average annual growth rate of GDP was:
A)4%.
B)7%.
C)10%.
D)40%.

Question

Quizplus · Accepted Answer

To find the average annual growth rate, we can use the formula:

Average Annual Growth rate = [(Ending Value / Beginning Value)^(1/Number of Years)] - 1

Plugging in the given values, we get:

Average Annual Growth rate = [(14/10)^(1/5)] - 1

This simplifies to:

Average Annual Growth rate = 0.074 or 7.4%

Rounding the answer to one decimal place gives us 7% as the nearest answer, which is option B.

GDP in a Country Grew from $10 Billion to $14