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Yearly Percent Increase Formula:
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The yearly percent increase calculator shows how a value grows over time when subject to compound growth at a constant annual rate. This is commonly used for financial projections, investment returns, inflation calculations, and population growth estimates.
The calculator uses the compound growth formula:
Where:
Explanation: The formula accounts for compound growth, where each year's growth builds upon the previous year's total, not just the original amount.
Details: Understanding compound growth helps in financial planning, investment decisions, and projecting future costs or revenues. It demonstrates how small percentage changes can lead to significant differences over long periods.
Tips: Enter the starting value, annual growth rate (as percentage), and number of years. All values must be positive numbers (years must be at least 1).
Q1: What's the difference between simple and compound growth?
A: Simple growth calculates interest only on the original amount, while compound growth calculates interest on both the original amount and accumulated interest.
Q2: How does changing the rate affect the outcome?
A: Small rate changes have exponential effects over time. A 5% vs 7% annual growth leads to dramatically different results over decades.
Q3: Can this calculator be used for depreciation?
A: Yes, by entering a negative rate, though most depreciation follows different models (straight-line, double-declining, etc.).
Q4: What's the Rule of 72?
A: A quick estimation tool: divide 72 by the annual rate to find how many years it takes for an investment to double (approximately).
Q5: Are there limitations to this calculation?
A: It assumes a constant growth rate, which rarely happens in reality. Actual growth rates typically fluctuate year-to-year.