function calculateGrowthRate() {
// Get input elements strictly by ID
var startInput = document.getElementById("initialValue");
var endInput = document.getElementById("finalValue");
var yearsInput = document.getElementById("periodYears");
var resultDiv = document.getElementById("aagr-result");
var errorDiv = document.getElementById("error-display");
// Parse values
var startVal = parseFloat(startInput.value);
var endVal = parseFloat(endInput.value);
var years = parseFloat(yearsInput.value);
// Validation Logic
if (isNaN(startVal) || isNaN(endVal) || isNaN(years)) {
errorDiv.style.display = "block";
errorDiv.innerHTML = "Please enter valid numbers in all fields.";
resultDiv.style.display = "none";
return;
}
if (years <= 0) {
errorDiv.style.display = "block";
errorDiv.innerHTML = "Number of years must be greater than 0.";
resultDiv.style.display = "none";
return;
}
if (startVal === 0) {
errorDiv.style.display = "block";
errorDiv.innerHTML = "Beginning value cannot be zero for growth rate calculation.";
resultDiv.style.display = "none";
return;
}
errorDiv.style.display = "none";
// Calculation Logic: Compound Annual Growth Rate (CAGR) formula
// Formula: ((End / Start) ^ (1 / n)) – 1
var ratio = endVal / startVal;
var exponent = 1 / years;
var annualGrowthDecimal = Math.pow(ratio, exponent) – 1;
var annualGrowthPercent = annualGrowthDecimal * 100;
// Total Growth Logic
var totalDiff = endVal – startVal;
var totalGrowthPercent = (totalDiff / startVal) * 100;
// Update UI
document.getElementById("growthResult").innerHTML = annualGrowthPercent.toFixed(2) + "%";
document.getElementById("absDiff").innerHTML = totalDiff.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("totalPercent").innerHTML = totalGrowthPercent.toFixed(2) + "%";
document.getElementById("multiplier").innerHTML = ratio.toFixed(2) + "x";
// Show result
resultDiv.style.display = "block";
}
How to Calculate Average Annual Growth Rate Over Multiple Years
Calculating the Average Annual Growth Rate is essential for businesses, investors, and analysts looking to understand how a specific metric—such as revenue, population, or portfolio value—has expanded over a set period. Unlike a simple percentage change, this calculation smoothes out the volatility of individual years to provide a standardized annual figure.
The most accurate method to calculate this over multiple years is using the Compound Annual Growth Rate (CAGR) formula. This geometric progression ratio provides a constant rate of return that would yield the final result from the initial value if the growth had happened at a steady rate every year.
The Formula
To calculate the average annual growth rate, you need three pieces of data: the Beginning Value, the Ending Value, and the number of years in the period. The mathematical formula is:
Beginning Value: The value at the start of the period.
n: The number of years involved.
Step-by-Step Calculation Example
Let's assume a company had revenue of 500,000 in Year 1 (Beginning Value) and it grew to 850,000 by Year 4 (Ending Value). The duration covers 3 full years of growth.
Divide Ending Value by Beginning Value: 850,000 / 500,000 = 1.7
Calculate the Exponent (1/n): 1 / 3 = 0.3333…
Raise the Result to the Power of the Exponent: 1.70.3333 ≈ 1.1935
Subtract 1: 1.1935 – 1 = 0.1935
Convert to Percentage: 0.1935 × 100 = 19.35%
This result means that the company grew at an average effective rate of 19.35% per year to reach the final figure.
Why Not Use Arithmetic Average?
A common mistake is to calculate the percentage growth for each year individually and then take the simple average (arithmetic mean) of those percentages. This method is often misleading for multi-year data.
For example, if an investment of 100 drops by 50% to 50 in Year 1, and then grows by 50% to 75 in Year 2, the arithmetic average growth is 0% ((-50% + 50%) / 2). However, you started with 100 and ended with 75, so you actually lost money. The formula used in the calculator above correctly accounts for the compounding effect, giving you the true performance rate.