How do you calculate the compounded growth rate where:
base year is 2,969 and current year is 20,912 after 25 years.
I won't give you the answer, but I can give you the formula:
20,912 = 2969 * (percent growth in decimal form)25 + 2969
How do you calculate the compounded growth rate where:
base year is 2,969 and current year is 20,912 after 25 years.
If you say 2,969 is "base year" then 20,912 is the Future Value.
The growth rate over 25 year is: 8.121% annual compound. You have to use this formula to calculate this: FV=PV(1 + R)^N=20,912=2,969(1+R)^25.
20,912=2,969(1+R)^25, divide both sides by 2,969
7.04345=(1+R)^25
(1+R)=7.04345^(1/25)
1+R=1.08121
R=1.08121 - 1
R=.08121 X 100=8.121%
