Economic growth The CIA World Facebook estimates the economi

Economic growth. The CIA World Facebook estimates the economic performance of countries. One such figure is the gross domestic product (GDP), which is the annual market value of goods and services produced in that country. In 2012 the GDP of United States was about 15.68 trillion dollars. It is predicted to grow by about 2.2% each year. What Is the projected value of the GDP in 2028 ? () GDP = trillion dollars

Solution

In U.S. economy, the GDP growth is 2.2 % each year from 2013 onwards. The GDP is $ 15.68 trillion in 2012. Therefore, using the formula for compounding, the GDP in 2028 will be 15.68( 1 + 2.2/100)¹⁶ = 15.68( 1.022)¹⁶ = 15.68* 1.416492674 = 22.21060513 = $ 22.2 trillion ( approximately, on rounding off to 1 decimal place).