Question

If annual real GDP per capita growth in South Africa averages 1.8%, how long will it take the country to double its real GDP per capita? (please provide your answer to the nearest year, if required) If Ireland took 15 years to double its real GDP per capita, what was its average annual GDP per capita growth rate during this period? (Please give your answer to two decimal places, if required) If annual real GDP per capita growth in Tanzania averages 0.8% per year, how long will it take the country to quadruple its real GÖP per capita? (please provide your answer to the nearest year, if required) If China took 40 years to increase its real GDP per capita eight fold, what was its average economic growth during this period? (Please give your answer to two decimal places, if required)

Answer 1

Answer:

USING RULE OF 70

Number of years to double = 70 ÷ annual percentage growth rate.

Therefore,

1. Number of years it will take South Africa to double its GDP = 70 ÷ 1.8

= 38.89

= 39 years

2. Average per capital growth rate of Ireland GDP = 70 ÷ No. Of years to double

=70 ÷ 15

= 4.67 %

3. Time it will take Tanzania to quadruple their GDP = (70 ÷ 0.8) × 2

= 87.5 × 2

= 175 years.

NOTE. We multiplied it by 2 because the question was quadruple not double.

4. Average economic growth of China during this period = (70 ÷ 40) × 3

= 1.75 × 3

= 5.25 %

Note - Rule of 70 is a method used in estimating an investment doubling time. We also have Rule of 72 and rule of 69.