Determine the average annual growth rate

Reference no: EM13182115

Real GDP in the U.S. increased by a% in 2008 and increased by b% in 2009, and increased by d% in 2010. In class, we learned that the average annual growth rate of real GDP for the period 2008-2010 can be

(1) approximated as: (a% +b% +d%)/3

(2) Differently, we can measure the average annual growth rate of real GDP for the period 2008-2010 as ((GDP2010 - GDP2007)/GDP2007)X(1/3)x(100) Prove that the average annual growth rate calculated by equation (1) is a good approximation to that calculated by equation (2)

Reference no: EM13182115

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