Thanks for the PM, ExpErdMann.
Quote:
ExpErdMann:
Now if the same body is lying on the Earth's surface, its gravitational potential energy is still GMm/r. To prevent the body from falling into the Earth's centre, there must be an outward force equal to this.
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You've mixed a couple quantities there, since force and energy cannot be equal.
Also, potential energy of an object is said to be zero at infinity, to balance the books. That is, if it is infinitely far from any object, it has no potential. As it gets closer to another mass, it loses potential energy. Thus, at a finite distance r it will have a negative potential energy, and the closer it gets to the Earth, the less it will have. All other things considered, that loss of potential energy is converted to kinetic energy, so at distance r its velocity would be just the escape velocity at that distance--the velocity that would be needed to "reverse" the process.
So, you would have 1/2 mv^2 + GMm/r = 0, where v is the escape velocity.
Orbital velocity is 1/sqrt(2) of the escape velocity. Put another way, its kinetic energy during orbit is a balance (an average) between zero (which would mean it would fall into the Earth) and escape.