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Percentage Increase Formula:
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This calculator computes the future value of an amount after applying a fixed annual percentage increase over a specified number of years. It's useful for financial planning, investment growth projections, and understanding compound growth.
The calculator uses the compound growth formula:
Where:
Explanation: The formula accounts for compound growth, where each year's increase is applied to the previous year's total, not just the original amount.
Details: This calculation is fundamental in finance for investment returns, in economics for inflation projections, in business for revenue growth estimates, and in personal finance for savings growth.
Tips: Enter the original amount, annual growth rate (as a percentage), and the number of years. All values must be positive (years must be at least 1).
Q1: What's the difference between simple and compound growth?
A: Simple growth applies the percentage only to the original amount each year. Compound growth applies it to the accumulated total, resulting in exponential growth.
Q2: How does changing the rate affect the result?
A: Small rate changes can lead to large differences over time due to compounding. A higher rate dramatically increases the final amount over many years.
Q3: Can I use this for monthly calculations?
A: For monthly calculations, divide the annual rate by 12 and multiply years by 12. The formula becomes (1 + (rate/1200))^(years*12).
Q4: What if my growth rate changes each year?
A: This calculator assumes a constant rate. For variable rates, you'd need to calculate each year separately with its specific rate.
Q5: How accurate are these projections?
A: Projections assume the rate remains constant, which rarely happens in reality. Use as an estimate, not a guarantee.