In 1950, Japan's real GDP per person was $2417; in 2000 it was $24 672. What is Japan's annual growth rate of real GDP per person?
A) 9.2 per cent
B) 4.76 per cent
C) 9.8 per cent
D) 10.2 per cent

Question

In 1950, Japan's real GDP per person was $2417; in 2000 it was $24 672. What is Japan's annual growth rate of real GDP per person? 
A) 9.2 per cent
B) 4.76 per cent
C) 9.8 per cent
D) 10.2 per cent

Quizplus · Accepted Answer

We can use the compound annual growth rate formula to calculate the annual growth rate:

[(Ending Value/Beginning Value)^(1/Number of Years)] - 1

Plugging in the values we get:

[($24 672/$2417)^(1/50)] - 1 = 0.0476

So the annual growth rate is approximately 4.76%, which is closest to answer choice B.

In 1950, Japan's Real GDP Per Person Was $2417; in 2000