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This article was co-written by Michael R. Lewis. Michael R. Lewis is a retired Texas executive, entrepreneur and investment advisor. He has over 40 years of experience in Business & Finance, including the position of Vice President of Blue Cross Blue Shield of Texas. He holds a BBA in Industrial Management from the University of Texas at Austin.
This article has been viewed 235,205 times.
Growth rate is a very useful indicator for looking at investment opportunities. Municipalities, schools and other groups also often use the annual growth rate of the population to predict demand for construction, services, etc. This statistic is very important and useful, and it is not too difficult to calculate on your own. Growth rate is a very useful indicator for looking at investment opportunities. Municipalities, schools and other groups also often use the annual growth rate of the population to predict demand for construction, services, etc. This statistic is very important and useful, and it is not too difficult to calculate on your own.
Steps
Calculate growth in a year
- For example, at the beginning of the year the population of a village is 125, the starting value is 125.
- For example, if the village’s year-end population is 275, the final value is 275.
- For example, a village at the beginning of the year has 150 people, and increases to 275 people at the end of the year. The calculation of the growth rate for the year is as follows:
- Growth rate =275−150150∗100{displaystyle ={frac {275-150}{150}}*100}
- =125150∗100{displaystyle ={frac {125}{150}}*100}
- ≈ 0.8333∗100{displaystyle 0.8333*100}
- = 83.33%{displaystyle 83.33%}
Calculate the annual growth of many years
- For example, if a company’s sales at the beginning of the period were $10,000, then the initial value is $10,000.
- For example, if the company’s sales at the end of the period were $65,000, the ending value would be $65,000.
- For example, if you want to calculate the annual growth rate of the company’s revenue from 2011 to 2015, the number of years is 4 i.e. from 2015 to 2011.
- Example: A company earns $10,000 in 2011 and four years later in 2015 it earns $65,000. So what is the annual growth rate?
- Enter the above values into the growth rate formula to find the answer:
- Annual growth rate =((6500010000)first4−first)∗100{displaystyle =(({frac {65000}{10000}})^{frac {1}{4}}-1)*100}
- =(6.5first4−first)∗100{displaystyle =(6.5^{frac {1}{4}}-1)*100}
- ≈(1.5967−first)∗100{displaystyle (1.5967-1)*100}
- = 59.67% annual growth
- Note – raise the value of a to the power firstb{displaystyle {frac {1}{b}}} will be equivalent to the square root b of a . You may need a calculator with a ” nx{displaystyle n{sqrt {x}}} ” to calculate, or using an online calculator.
This article was co-written by Michael R. Lewis. Michael R. Lewis is a retired Texas executive, entrepreneur and investment advisor. He has over 40 years of experience in Business & Finance, including the position of Vice President of Blue Cross Blue Shield of Texas. He holds a BBA in Industrial Management from the University of Texas at Austin.
This article has been viewed 235,205 times.
Growth rate is a very useful indicator for looking at investment opportunities. Municipalities, schools and other groups also often use the annual growth rate of the population to predict demand for construction, services, etc. This statistic is very important and useful, and it is not too difficult to calculate on your own. Growth rate is a very useful indicator for looking at investment opportunities. Municipalities, schools and other groups also often use the annual growth rate of the population to predict demand for construction, services, etc. This statistic is very important and useful, and it is not too difficult to calculate on your own.
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