Question

Compound growth in an economy can increase people’s standard of living for country Z. If the economy for country Z starts with a GDP of 150 and a growth rate of 2% per year, what will its GDP be after 15 years?

Answer 1

Answer:

The GDP after 15 years=202

Explanation:

The GDP also known as the Gross Domestic Product is the quantity of goods and services produced in a country during a certain period in time usually expressed in monetary terms. GDP usually illustrates how much the country's economy is growing and expanding.

To determine the GDP after 15 years, we can have the expression below;

F=P(1+r/n)^nt

where;

F=future GDP

P=initial GDP

r=growth rate per year

n=number of times the growth rate is applied per year

t=number of years

In our case;

F=unknown, to be determined

P=150

r=2%=2/100=0.02

n=1

t=15 years

Substituting;

F=150(1+0.02)^(15×1)

F=150(1.02)^15

F=201.88=202

The GDP after 15 years=202