The president of the World Bank has asked you to calculate the average per capita GDP growth rate of Rwanda from 1980 to 2010. In 1980, per capita GDP was about $728 and in 2010 about $1,025. You tell him the average growth rate of per capita GDP is about:
A) 1.1 percent
B) -1.1 percent
C) 0.0 percent
D) -2.3 percent
E) 20.2 percent

Question

Quizplus · Accepted Answer

The average annual growth rate can be calculated using the formula for compound annual growth rate (CAGR): [(Final Value/Initial Value)^(1/Number of Years)] - 1. Using the given values: [(1025/728)^(1/30)] - 1 ≈ 0.011 or 1.1%.

The President of the World Bank Has Asked You to Calculate