Simple Growth Rate Calculation
Formula for calculating simple growth rate (SGR) is straightforward:
[Tex]SGR = (\frac{Final Value – Initial Value}{Initial Value}) \times 100\%[/Tex]
Let’s break down this formula with an example:
Suppose you invested $1,000 in a stock, and after one year, the value of your investment increased to $1,200. To calculate the simple growth rate:
[Tex]SGR = (\frac{\$1200 – \$1000}{\$1000}) \times 100\% = (\frac{\$200}{\$1000}) \times 100\% = 20\%[/Tex]
So, the simple growth rate of your investment over one year is 20%
Growth Rates: Formula, How to Calculate, and Examples
Growth rate is essential for analyzing changes over time in various fields, from finance and economics to population dynamics and scientific research. Whether you’re assessing the growth of an investment, the expansion of a business, or the increase in population, knowing how to calculate the growth rate accurately is invaluable.
In this article, we’ll explore different methods of calculating growth rates and provide examples to help you master this fundamental concept.
Table of Content
- What is Growth Rate?
- How to Calculate Growth Rates
- Simple Growth Rate Calculation
- Compound Annual Growth Rate (CAGR)
- Interpretation and Significance of Growth Rate
- Positive Growth Rate
- Negative Growth Rate
- Zero Growth Rate
- Factors Influencing Growth Rate
- Conclusion
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