The FDI inflow into India was $10billionin2000and$30 billion in 2020. For Bangladesh, it was $2billionin2000and$12 billion in 2020. Compute the compound annual growth rate (CAGR) of FDI inflows for each country over this period and state which country had a higher CAGR.

Step-by-step solution

1. India: Ratio = 30/10 = 3.
2. CAGR = 3^(1/20) – 1.
3. ln(3)=1.0986; 1/20=0.05; 0.05×1.0986=0.05493; exp(0.05493)=1.0564; 1.0564–1=0.0564 → 5.64%.
4. Bangladesh: Ratio = 12/2 = 6.
5. CAGR = 6^(1/20) – 1.
6. ln(6)=1.7918; 0.05×1.7918=0.08959; exp(0.08959)=1.0937; 1.0937–1=0.0937 → 9.37%.
7. Compare 5.64% and 9.37%; Bangladesh’s CAGR is higher.

Concept tested: CAGR of FDI inflows

Published 13 October 2026 · How this solution was prepared and checked