3 Suppose that Vanuatu had a GDP percapita in 1900 of 1000 a

3. Suppose that Vanuatu had a GDP per-capita in 1900 of $1000, and in 1948 it was $4000. Approximate the annual rate of growth during this period. 4. In 1900, Per-Capita GDP in Japan was $2000. In 2017 it was $47,000. (a) Calculate the growth rate in per-capita GDP over this period. (b) If this growth rate continues, what will Japan\'s PC GDP be 50 years from now?

Solution

3. Annual rate of growth = (GDP per capita in 1948 - GDP per capita in 1900)/GDP per capita in 1900 x 100

= (4000 - 1000)/1000 x 100 = 300%

4. a) Growth rate = (47000 - 2000)/2000 x 100 = 45000/2000 x 100 = 45 x 50 = 2250%

b) Total growth in 2017 - 1900 = 117 years = 2250%

so growth in 1 year = 2250/117 = 19.23%

and in 50 years = 19.23 x 50 = 961.54%

So, Japan\'s PC GDP = 2000 + 961.54% of 2000 = 2000 + 19230.8 = 21230.8