Consider an imaginary economy that has been growing at a rate of 3% per year. Government economists have proposed a number of policies to increase the growth rate but first need to convince the president that the policies will pay off. To do so, they want to present a comparison of the number of years it will take for the economy to double, depending on the growth rate. Using the rule of 70, determine the number of years it will take the economy to double at each growth rate.

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Business

Coleman Hoffman

27 April, 15:11

Consider an imaginary economy that has been growing at a rate of 3% per year. Government economists have proposed a number of policies to increase the growth rate but first need to convince the president that the policies will pay off. To do so, they want to present a comparison of the number of years it will take for the economy to double, depending on the growth rate. Using the rule of 70, determine the number of years it will take the economy to double at each growth rate.

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Answers (1)

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Jordon Rowe · Answer 1

It will take 23 years and 120 days to double.

Explanation:

Giving the following information:

Consider an imaginary economy that has been growing at a rate of 3% per year.

We have to use the rule of 70 to determine the number of ears it will take to this economy to double.

Number of Years to Double = 70/growth rate

n = 70 / 3 = 23.33

To be more accurate:

0.33*365 = 120 days

It will take 23 years and 120 days to double.