How to Calculate an Annual Percentage Growth Rate

Annual percentage growth rates are useful when considering investment opportunities. Municipalities, schools and other groups also use the annual growth rate of populations to predict needs for buildings, services, etc. As important and useful as these statistics are, it is not difficult to calculate annual percentage growth rates. When considering growth over several years, using a calculation similar to compounded interest rates accounts for instability over time, as there may be periods of varying growth or even of decreases.

Steps

Growth Rate Calculator

Percentage Growth Rate Calculator


Single-Year Growth Rate Percentage

    1
    Determine the value of the investment or the population at the beginning of the year in question and at the end of the year. Imagine that City A had a population of 150,000 at the beginning of the time period and 275,000 at the end.
    2
    Subtract the beginning value from the ending count. For the example, your calculation would be 275,000 - 150,000 = 125,000.
    3
    Divide the difference by the original value. In this case, 125,000/150,000 = .8333.
    4
    Multiply the decimal by 100 to change it to a percentage: .8333 x 100 = 83.33. City A experienced a population growth of 83.33 percent in this year.

Multiple-Year Growth Rate Percentage

    1
    Subtract the beginning value from the ending value to determine total growth. City B started with a population of 10,000. After 5 years, the population has grown to 65,000. The increase is expressed as 65,000 - 10,000 = 55,000.
    2
    Divide the difference by the original value or, for the example, 55,000/10,000 = 5.5.
    3
    Divide this number by the number of years involved. For the City B case, 5.5/5 = 1.1.
    4
    Multiply by 100 to convert the decimal to a percent: 1.1 x 100 = 110. City B has an average annual growth percentage rate of 110 percent.