Applicable formula:
A = P (1+r)^n
Where;
A = Final GDP = 2P
P = Initial GDP = $25,000
r = annual growth rate = 7% = 0.07
n = Time in which GDP will double
Therefore;
2P = P (1+0.07)^n
2P/P = (1.93)^n
2 = 1.93^n
Taking natural logs on both sides;
ln 2 = n ln 1.93
0.6931 = 0.6575n
n = 0.6931/0.6575 = 1.05 years.
Therefore, GDP will double after 1.05 years.
