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3 Examples of a Growth Rate Calculation

 , December 28, 2020
A growth rate is the percentage change in a variable in a period of time. The following are basic examples of how to calculate a growth rate using the growth rate formula.

Growth Rate Formula

The growth rate formula for two time periods is as follows.
For example, world population grew from an estimated 7.713 in 2019 to 7.795 billion in 2020. Giving a growth rate of:
The result above was rounded to two decimal places.

Negative Growth

The same formula is used to calculate a negative rate of growth. For example, if your revenue was $4 million in one year and $3 million the next you can calculate your revenue growth as follows.

Compound Annual Growth Rate

A compound annual growth rate (CAGR) is the growth rate per year based on a beginning and ending value. It is calculated with the following formula where n is the number of time periods.
For example, if you begin with 1 million in revenue and grow to 2 million in revenue 10 years later your compound annual growth rate is as follows.
Overview: Growth Rate
The percentage change in a variable in a period of time.
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