Growth Rate Calculator
Calculate the growth rate between two values over a specified time period. Supports simple percentage growth and CAGR (Compound Annual Growth Rate).
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Understanding Growth Rates
Simple Growth Rate Formula
Calculates the total percentage change between two values:
Growth Rate = [(Final Value - Initial Value) / Initial Value] × 100
CAGR Formula (Compound Annual Growth Rate)
Measures smoothed annual growth over multiple periods:
CAGR = [(Final Value / Initial Value)^(1/Time Period) - 1] × 100
Growth Rate Examples
Example 1: Investment Growth
Scenario: An investment grows from $1,000 to $1,500 over 3 years.
Simple Growth: [(1500 - 1000)/1000] × 100 = 50% (total growth).
CAGR: [(1500/1000)^(1/3) - 1] × 100 ≈ 14.47% (annualized).
Example 2: Population Growth
Scenario: A town grows from 10,000 to 15,000 people in 5 years.
Simple Growth: 50% total growth.
CAGR: ≈ 8.45% per year.
Example 3: Revenue Decline
Scenario: Revenue falls from $200,000 to $180,000 in 2 years.
Simple Growth: -10% (decline).
CAGR: ≈ -5.13% per year.
Frequently Asked Questions
1. What’s the difference between simple growth rate and CAGR?
Simple growth measures total change, while CAGR smooths growth evenly over each year.
2. When should I use CAGR?
Use CAGR for multi-year comparisons (e.g., investments, business metrics).
3. Can growth rate be negative?
Yes, if the final value is lower than the initial value.
