Question

In 1900 GDP per capita in Japan (measured in year 2005 dollars) was $1,617. In 2000 it was $29,639. Calculate the average annual growth rate of income per capita in Japan over this period. Now suppose that Japan grew at the same annual rate from 2001 to 2010. What would Japanese GDP per capita have been in the year 2010?

Answer 1

Average annual growth rate is 2.95%

Japanese GDP per capita have been in the year 2010 will be $39,639

Step-by-step explanation:

Per capita Income in 1900 = $1,617

Per capita Income in 2000 = $29,639

Average Growth Rate = ( ( Per Capita Income of 2000 / Per capita income of 1900 )^1/number of years ) -1

Average Growth Rate = ( ( 29,639 / 1,617 )^1/100 ) -1

Average Growth Rate = 2.95%

GDP per capita In 2010 = GDP per capita In 2000 ( 1 + g )^n

GDP per capita In 2010 = 29,639 ( 1 + 0.0295 )^10

GDP per capita In 2010 = $39,639