If,between 2003 and 2013,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 find the average annual growth rate, we need to use the compound annual growth rate formula:

CAGR = (Ending Value / Beginning Value)^(1/Number of Years) - 1

Plugging in the values given:

CAGR = ($40 billion / $20 billion)^(1/10) - 1 
CAGR = 1.07 - 1 
CAGR = 0.07 or 7%

Therefore, the average annual growth rate in the economy was 7%.

If,between 2003 and 2013,the Economy's Real GDP Grew from $20