Growth Rate Calculator
Understanding Growth Rate
The growth rate is a fundamental concept used in various fields to measure how a quantity changes over a specific period. In mathematics and finance, it quantifies the percentage change of a value from one point in time to another. A positive growth rate indicates an increase, while a negative growth rate signifies a decrease.
How to Calculate Growth Rate:
The formula for calculating the absolute growth rate between two values is straightforward:
Absolute Growth Rate = Ending Value – Starting Value
To express this growth as a percentage relative to the starting value, you can use the following formula:
Percentage Growth Rate = ((Ending Value – Starting Value) / Starting Value) * 100
When considering the growth over a period, such as in finance or economics, we often look at the Compound Annual Growth Rate (CAGR). CAGR represents the mean annual growth rate of an investment over a specified period of time longer than one year. The formula for CAGR is:
CAGR = ( (Ending Value / Starting Value) ^ (1 / Time Period) ) – 1
This calculator will provide you with both the simple percentage growth and the Compound Annual Growth Rate (CAGR) if a time period is provided.
Example:
Let's say your investment started at $10,000 (Starting Value) and grew to $15,000 (Ending Value) over 5 years (Time Period).
- Absolute Growth: $15,000 – $10,000 = $5,000
- Percentage Growth: (($15,000 – $10,000) / $10,000) * 100 = 50%
- CAGR: (($15,000 / $10,000) ^ (1 / 5)) – 1 = (1.5 ^ 0.2) – 1 ≈ 1.08447 – 1 ≈ 0.08447 or 8.45%
This means your investment experienced a total growth of 50% over the 5 years, and on average, it grew by approximately 8.45% each year when compounded.
function calculateGrowthRate() {
var startValue = parseFloat(document.getElementById("startValue").value);
var endValue = parseFloat(document.getElementById("endValue").value);
var timePeriod = parseFloat(document.getElementById("timePeriod").value);
var resultDiv = document.getElementById("result");
if (isNaN(startValue) || isNaN(endValue) || isNaN(timePeriod)) {
resultDiv.innerHTML = "Please enter valid numbers for all fields.";
return;
}
if (startValue === 0) {
resultDiv.innerHTML = "Starting value cannot be zero for percentage and CAGR calculations.";
return;
}
var absoluteGrowth = endValue – startValue;
var percentageGrowth = ((absoluteGrowth / startValue) * 100);
var resultHTML = "
Results:
";
resultHTML += "
Starting Value: " + startValue.toFixed(2) + "";
resultHTML += "
Ending Value: " + endValue.toFixed(2) + "";
resultHTML += "
Absolute Growth: " + absoluteGrowth.toFixed(2) + "";
resultHTML += "
Percentage Growth: " + percentageGrowth.toFixed(2) + "%";
if (timePeriod > 0) {
var cagr = (Math.pow((endValue / startValue), (1 / timePeriod)) – 1) * 100;
resultHTML += "
Time Period: " + timePeriod.toFixed(2) + " years";
resultHTML += "
Compound Annual Growth Rate (CAGR): " + cagr.toFixed(2) + "%";
} else if (timePeriod === 0 && startValue === endValue) {
resultHTML += "
Time Period: 0 years";
resultHTML += "
Compound Annual Growth Rate (CAGR): 0.00% (No change over no time)";
}
resultDiv.innerHTML = resultHTML;
}
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