Question

Real per capita GDP in Singapore in 1960 was about $450, but it doubled to about $900.00 by 1977. a. What was the average annual economic growth rate in Singapore over the 17.00 years from 1960 to 1977? (NOTE: Round this to two places past the decimal point.)

Answer 1

Answer:

4.16%

Explanation:

to calculate Singapore's economic growth rate we can use the future value formula (we could also use the rule of 72 but it is not very exact):

future value = present value x (1 + r) ⁿ

• future value = 900
• present value = 450
• n = 17
• r = ?

900 = 450 (1 + r)¹⁷

(1 + r)¹⁷ = 900 / 450 = 2

1 + r = ¹⁷√2 = 1.0416

r = 1.0416 - 1 = 0.0416 or 4.16%