Question

Question Set 3: Rule of 70

The following table details the growth rate in RGDP per capita for the countries listed from 1975 to 2009.

Country	Growth Rate in RGDP per Capita
Botswana	4.23
Kenya	0.43
Malawi	-0.95
Rwanda	1.09
Uganda	1.25

Taking the information in the table into consideration, answer the following question:

If each country continues to grow at the rate it grew from 1975-2009, how long would it take RGDP per capita to double in each country?

Answer 1

Using Rule of 70 -

Rule of 70 is used to determine the number of years a variable will take to double itself.

Number of years are calculated by dividing the 70 by growth rate of variable.

The growth rate of variable should be in positive. In case of negative growth rate, Rule of 70 cannot be used.

Country - Botswana

Growth rate in RGDP per capita = 4.23%

Calculate the number of years that Botswana would take to double its RGDP per capita -

Number of years = 70/Growth rate in RGDP per capita

Number of years = 70/4.23 = 16.55 or 17 years

Thus,

Botswana would take approximately 17 years to double its RGDP per capita.

Country - Kenya

Growth rate in RGDP per capita = 0.43%

Calculate the number of years that Kenya would take to double its RGDP per capita -

Number of years = 70/Growth rate in RGDP per capita

Number of years = 70/0.43 = 162.79 or 163 years

Thus,

Kenya would take approximately 163 years to double its RGDP per capita.

Country - Malawi

The growth rate of RGDP per capita in case of Malawi is in negative.

Rule of 70 cannot be used in case of negative growth rate.

So, number of years in which Malawi will double its RGDP per capita cannot be calculated.

Country - Rawanda

Growth rate in RGDP per capita = 1.09%

Calculate the number of years that Rawanda would take to double its RGDP per capita -

Number of years = 70/Growth rate in RGDP per capita

Number of years = 70/1.09 = 64.22 or 64 years

Thus,

Rawanda would take approximately 64 years to double its RGDP per capita.

Country - Uganda

Growth rate in RGDP per capita = 1.25%

Calculate the number of years that Uganda would take to double its RGDP per capita -

Number of years = 70/Growth rate in RGDP per capita

Number of years = 70/1.25 = 56 years

Thus,

Uganda would take 56 years to double its RGDP per capita.