1. What is the Stock Growth Formula?

The stock growth formula calculates how an investment grows over time with compound returns. It's based on the principle of compound interest, where each period's growth builds on the previous total.

2. How Does the Calculator Work?

The calculator uses the compound growth formula:

Where:

• Old Stock — Initial investment amount
• Rate — Periodic growth rate (as percentage)
• Periods — Number of compounding periods

Explanation: The formula accounts for exponential growth where each period's return is calculated on the accumulated value from previous periods.

3. Importance of Stock Growth Calculation

Details: Understanding potential investment growth helps with financial planning, comparing investment options, and setting realistic financial goals.

4. Using the Calculator

Tips: Enter initial investment amount, expected periodic growth rate (as percentage), and number of periods. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between simple and compound growth?
A: Simple growth calculates returns only on the principal, while compound growth calculates returns on both principal and accumulated returns.

Q2: How often should periods be for accurate calculation?
A: Periods should match the actual compounding frequency (e.g., use 12 for monthly growth over 1 year if rate is monthly).

Q3: Can this be used for stock price projections?
A: While it can model steady growth, actual stock prices are volatile and don't grow at constant rates.

Q4: How does inflation affect these calculations?
A: For real (inflation-adjusted) returns, use a rate that's already adjusted for expected inflation.

Q5: What about taxes and fees?
A: For net returns, reduce the growth rate by expected tax rates and investment fees.