Logarithmic Growth Rate Calculator
Calculation Results:
Logarithmic Growth Rate (r):
Percentage Growth Rate:
Formula used: r = [ln(Nₜ) – ln(N₀)] / t
Understanding the Logarithmic Growth Rate
The logarithmic growth rate, often referred to as the continuous growth rate or exponential growth coefficient, is a critical metric used in biology, finance, and demographics. Unlike simple arithmetic growth, the log growth rate accounts for the way a quantity grows proportionally to its current size over time.
The Log Growth Formula
The calculation is based on the natural logarithm (base e). The fundamental formula is:
- r: The logarithmic growth rate.
- Nₜ: The final population or value at the end of the period.
- N₀: The initial population or value at the start.
- t: The time interval elapsed between the two measurements.
- ln: The natural logarithm.
Why Use Logarithmic Growth Instead of Simple Growth?
While a standard percentage change (Final – Initial / Initial) is useful for one-off snapshots, the log growth rate is superior for analyzing processes that grow continuously. For example, bacterial cultures or compounded interest do not wait for the end of a year to grow; they grow every second. Logarithmic rates are additive across multiple time periods, making them more mathematically robust for long-term data analysis.
Practical Examples
Example 1: Population Biology
Suppose a colony of bacteria starts with 200 cells (N₀). After 5 hours (t), the population has grown to 1,200 cells (Nₜ).
Calculation: [ln(1200) – ln(200)] / 5 = [7.090 – 5.298] / 5 = 0.358.
The logarithmic growth rate is 0.358, or 35.8% per hour.
Example 2: Financial Compounding
If an investment portfolio grows from 10,000 units to 15,000 units over 3 years, the log growth rate helps determine the "force of interest."
Calculation: [ln(15000) – ln(10000)] / 3 = 0.4054 / 3 = 0.1351.
The continuous annual growth rate is 13.51%.
Key Differences: Log Growth vs. CAGR
While the Compound Annual Growth Rate (CAGR) assumes discrete compounding (usually once a year), the log growth rate assumes growth happens every instant. In most cases, the log growth rate will be slightly lower than the CAGR for the same numerical increase, as it reflects the efficiency of continuous compounding.