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 was about $1,025. You tell him the average growth rate of per capita GDP is about ________ percent.
A) 1.1
B) -1.1
C) 0.0
D) -2.3
E) 20.2

Question

Quizplus · Accepted Answer

The average growth rate can be calculated using the formula for compound annual growth rate (CAGR), which is $[(\text{Final Value} / \text{Initial Value})^{(1/\text{Number of Years})}] - 1$. Plugging in the values: $[(\$1,025 / \$728)^{(1/30)}] - 1$, we find that the growth rate is approximately 1.1%.

The President of the World Bank Has Asked You to Calculate