1. What is the Percent Increase Formula?

The compound growth formula calculates how a value increases over time when a fixed percentage growth is applied each year. This is different from simple interest where growth is calculated only on the original amount.

2. How Does the Calculator Work?

The calculator uses the compound growth formula:

Where:

• \( Old\ Value \) — Starting amount or value
• \( Rate \) — Annual growth rate percentage
• \( Years \) — Number of years for growth

Explanation: Each year's growth becomes part of the base for the next year's growth, creating exponential growth over time.

3. Understanding Compound Growth

Details: Compound growth is powerful over long periods. For example, 7% annual growth doubles a value in about 10 years (Rule of 72: 72/7 ≈ 10.3 years).

4. Using the Calculator

Tips: Enter the starting value, annual growth rate (as percentage), and number of years. The calculator shows the final value and a growth chart.

5. Frequently Asked Questions (FAQ)

Q1: How is this different from simple interest?
A: Simple interest calculates growth only on the original amount each year. Compound growth calculates growth on the growing total each year.

Q2: What's the Rule of 72?
A: A quick way to estimate doubling time: divide 72 by the growth rate. For 6% growth, 72/6 = 12 years to double.

Q3: Can I use this for negative growth rates?
A: Yes, the formula works for negative rates (declines) too, though the graph will slope downward.

Q4: How accurate is this for real-world investments?
A: It assumes constant growth rate, which rarely happens. Real investments fluctuate year-to-year.

Q5: Can I calculate monthly instead of yearly?
A: Yes, convert annual rate to monthly (divide by 12) and years to months (multiply by 12).