Table 17.1 information: Net Growth Rate (%) Doubling Time (Years) 0.0% Never 0.5

Question

Table 17.1 information:

Net Growth Rate (%)                            Doubling Time (Years)

0.0%                                                      Never

0.5                                                         144 years

1.0                                                         72

1.5                                                         48

2.0                                                         36

2.5                                                         29

3.0                                                         24

3.5                                                         21

4.0                                                         18

According to the Rule of 72 (Table 17.1), how many years will it take for GDP to double if the economy is growing at:

(a) 1.5 percent a year?

(b) 2.8 percent a year?

Explanation / Answer

a) doubling year = 72/1.5 = 48 years

b)doubling year = 72/2.8 = 25.71 years

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