During the Fourth Five-Year Plan (1967‑1971), India's GDP grew at an average annual rate of 4 %. If the GDP at the start of the plan was Rs 1.5 lakh crore, estimate its value at the end of the plan.
Answer
Rs 1.83 lakh crore
The correct answer is Rs 1.83 lakh crore — Round to two decimal places to get Rs 1.83 lakh crore.
Step-by-step solution
- Apply compound growth: Final = Initial × (1 + rate)^years.
- Compute (1 + 0.04)^5 = 1.21665.
- Multiply 1.5 × 1.21665 = 1.82498 lakh crore.
- Round to two decimal places to get Rs 1.83 lakh crore.
Common mistake: Using simple interest instead of compound growth
Concept tested: Compound growth of GDP
Published · How this solution was prepared and checked
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