This Percentage Growth Rate Calculator helps you determine the gain, annual growth rate, and overall percentage growth from an initial to a final value over a specific time period. Ideal for assessing investments or other growth metrics, this tool provides clear insights into how values evolve over time.
Percentage Growth Rate Calculator
Calculate the percentage growth rate over a specified period, showing both gain and growth rate.
How to Use the Percentage Growth Rate Calculator
Enter the final value after the growth period and the initial value before growth began. Input the time in years for which you want to calculate the growth. After hitting “Calculate,” the tool will display the gain, the annual growth rate, and the total percentage growth.
Formula for Growth Rate Calculation
The growth rate formula is derived from compound interest and provides insight into how much a value has grown on average each year.
The formula is as follows:
\( \text{Growth Rate} = \left( \frac{\text{Final Value}}{\text{Initial Value}} \right)^{\frac{1}{\text{Time}}} – 1 \)This formula calculates the average annual growth rate, showing how values would grow if they compounded at a steady rate.
Example Calculation
Suppose an initial investment of $5,000 grows to $7,500 over five years. Here’s how you would calculate the growth:
Gain: $7,500 – $5,000 = $2,500
Growth Rate: \( \left( \frac{7500}{5000} \right)^{\frac{1}{5}} – 1 \approx 0.08447 \) or 8.45% per year.
Total Growth: \( \frac{7500 – 5000}{5000} \times 100 = 50% \)
This indicates a 50% total growth over five years, with an average annual growth rate of approximately 8.45%.
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