Growth Formula:
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The growth formula calculates the future value of an investment or quantity based on a constant growth rate over time. It's fundamental in finance, economics, and population studies.
The calculator uses the growth formula:
Where:
Explanation: The formula compounds growth over each period, showing exponential rather than linear growth.
Details: Understanding compound growth helps in financial planning, investment analysis, business forecasting, and understanding population dynamics.
Tips: Enter start value (positive number), growth rate (decimal between 0 and 1), and time periods (positive integer). For percentages, convert to decimal (5% = 0.05).
Q1: What's the difference between simple and compound growth?
A: Simple growth adds the same amount each period, while compound growth multiplies by (1 + rate) each period, leading to exponential growth.
Q2: How do I convert annual percentage to decimal?
A: Divide by 100 (e.g., 7% becomes 0.07). For monthly rates, divide annual rate by 12.
Q3: Can this calculate negative growth?
A: Yes, use negative rate (e.g., -0.05 for 5% decline), though our calculator currently restricts to positive rates.
Q4: What if growth rates change over time?
A: This calculator assumes constant growth. For variable rates, you'd need to calculate each period separately.
Q5: How accurate is this for long-term projections?
A: While mathematically correct, long-term projections become less reliable as real-world conditions change.