If both values are the same, there is no growth - the growth rate is 0.
In our example, we’ll insert 310 as our present value and 205 as our past value. Our formula will look like this: (310 - 205)/205 = 105/205 = 0. 51
In our example, we’ll insert 310 as our present value and 205 as our past value. Our formula will look like this: (310 - 205)/205 = 105/205 = 0. 51
So, for our example, we would multiply 0. 51 by 100, then add a percent sign. 0. 51 x 100 = 51%. Our answer means our growth rate is 51%. In other words, our present value is 51% bigger than our past value. If our present value was smaller than our past value, our growth rate would be negative.
This method will give us an average growth rate for each time interval given past and present figures and assuming a steady rate of growth. Because our example uses years, this means we’ll get an average annual growth rate.
This method will give us an average growth rate for each time interval given past and present figures and assuming a steady rate of growth. Because our example uses years, this means we’ll get an average annual growth rate.
This method will give us an average growth rate for each time interval given past and present figures and assuming a steady rate of growth. Because our example uses years, this means we’ll get an average annual growth rate.
If your algebra works out, you should get: growth rate = (present / past)1/n - 1 .
In our example, we’ll use our present figure of 310 and our past figure of 205, along with a time period of 9 years for n. In this case, the average annual growth rate is simply (310/205)1/9 - 1 = . 0422 0. 0422 x 100 = 4. 22%. On average, our value grew by 4. 22 percent each year.
