How do you calculate annual growth rates? (2024)

Learn how to calculate the annual growth rate of the population of living things in your environment.

One of the most basic analyses we perform in environmental science is estimating growth rates, whether it’s the growth rate of Koala populations in a forest reserve, the growth rate of fossil fuel use, or the growth rate of human populations over time.

Calculating a growth rate is not much more difficult than calculating a percentage. We know that 5 people out of 20 is 25% of the population. That calculation looks like this

How do you calculate annual growth rates? (1)

But what if we want to know how fast we’re adding people? Again, calculating this isn’t much more difficult than figuring out how fast you’re going on a road. Let’s say we’ve traveled 30 km in 10 hours. We can easily work out we’ve been walking at 3km/hr by dividing 30 km by 10 hours.

Want to keep
learning?

This content is taken from
Central Queensland University online course,

A Beginner's Guide to Environmental Science: Wicked Problems and Possible Solutions

View Course

So let’s keep percentages and rates in the back of our mind and start with an example for calculating human population growth:

In 1990, the population of Tasmania, Australia was 250,000 people. In 2000, it was 280,000 people.

How do you calculate annual growth rates? (2)

In this case, t0 is population the first time it was measured, or 250,000 people (the 0 subscript in t0 indicates the initial, or starting, time). The population at Time 1, or t1, is 280,000 people.

Population Growth Calculation

To calculate the Population Growth (PG) we find the difference (subtract) between the initial population and the population at Time 1, then divide by the initial population and multiply by 100.

How do you calculate annual growth rates? (3)

The Population Growth Rate (PGR) for that period of time (10 years) was 12%. Compare this equation to the one we used above to calculate percent and you will see that they are very similar.

Now, that’s the total Population Growth (PG) over 10 years – it’s not a rate yet. A rate is simply, change per unit of time. We know that the growth took place over 10 years, so if we divide the total PG by 10 years, we’ll be left with a percentage change per year, or the Population Growth Rate (PGR).

How do you calculate annual growth rates? (4)

What if we want to know how long it will take for a population to double, or the Doubling Time (DT)? Once we know the Population Growth Rate (PGR) we can use the Rule of 70 (a neat little trick from the field of economics) to help us figure out how many years it will take for a population to double.

How do you calculate annual growth rates? (5)

Let’s use our Tasmanian example. We know that every year the population of Tasmania increases 1.2%. To calculate the estimated DT (in years) of the population in Tasmania, simply divide 70 by 1.2% per year.

How do you calculate annual growth rates? (6)

So, if the PGR of Tasmania doesn’t change, then it will take just over 58 years to double the population. In the next step, you’ll get to use your calculator to calculate the PG, PGR and DT of a nation.

Give it a try, and feel free to apply this great method to lots of other things in your life, environmental or otherwise.

© Central Queensland University 2021

How do you calculate annual growth rates? (2024)

FAQs

How do you calculate annual growth rates? ›

Growth rates are computed by dividing the difference between the ending and starting values for the period being analyzed and dividing that by the starting value. Time periods used for growth rates are most often annually, quarterly, monthly, and weekly.

How do you calculate annual growth rate? ›

Growth rates are computed by dividing the difference between the ending and starting values for the period being analyzed and dividing that by the starting value. Time periods used for growth rates are most often annually, quarterly, monthly, and weekly.

What is the formula for the annual real growth rate? ›

To calculate the growth rate for both nominal and real GDP, two data years are needed. The GDP of year 2 is divided by the GDP of year 1 and the answer is subtracted by one. That is, Growth Rate = (GDP_Year2/ GDP_Year 1) - 1.

What is the formula for the annual population growth rate? ›

A general formula for calculating the population growth rate is Gr = N / t. Gr is the growth rate measured in individuals, N is the change in population, and t is the period of time.

How to calculate annual rate? ›

Here's how to calculate annual rate of return:
  1. Subtract the initial investment you made at the beginning of the year (“beginning of year price” or “BYP”) from the amount of money you gained or lost at the end of the year (“end of year price” or “EYP.”)2. ...
  2. Multiply the number by 100 to get the percentage.
Feb 12, 2024

Why calculate annual growth rate? ›

It shows you the average rate of return on your investments over a year. CAGR is a helpful tool for investors because it precisely measures investment growth (or decline) over time. When calculating CAGR, profits are assumed to be reinvested at the end of each year of the time horizon.

What is an example of a growth rate? ›

Growth rate examples
  • Growth rate = (489 - 402) / 402.
  • Absolute change = 87 (489 - 402)
  • Growth rate = 0.2164 (87 / 402)
  • Percent change = 21.64% (0.2164 x 100)
Apr 14, 2023

What is the annual growth? ›

Annual growth rate (AGR) is the change in the value of a measurement over the period of a year.

What does annual growth rate mean? ›

What is the formula for growth rate quizlet? ›

The overall equation for growth rate, is growth rate= (birth rate+ immigration rate) - (death rate+ emigration rate.)

How to calculate the growth rate of a company? ›

A company's growth rate is calculated by dividing the difference between the current period value and the previous period value with the previous period value. It's expressed as a percentage.

What is the annual rate rate? ›

APR is the annual cost of a loan to a borrower — including fees. Like an interest rate, the APR is expressed as a percentage. Unlike an interest rate, however, it includes other charges or fees such as mortgage insurance, most closing costs, discount points and loan origination fees.

What is the formula for annual growth rate in Excel? ›

The growth rate formula looks like this: Growth Rate = (ending value - beginning value / beginning value) x 100.

What is the formula for AAGR in Excel? ›

Enter the formula: Click on the cell where you want the AAGR result to appear. Type in the formula using the cell references for your start value, end value, and number of years. For instance, if your start value is in A1, end value in A2, and the number of years in A3, your formula will look like =((A2/A1)^(1/A3))-1 .

What is the formula for CAGR in Excel? ›

The Microsoft Excel CAGR formula. (Ending Value/Beginning Value) ^ (1/No. of Periods) – 1read more returns the CAGR value, i.e., the Compound Annual Growth Rate in Excel from the supplied values set. CAGR measures the return value on an investment, which is calculated over a certain period.

Top Articles
Latest Posts
Article information

Author: Pres. Lawanda Wiegand

Last Updated:

Views: 6100

Rating: 4 / 5 (51 voted)

Reviews: 90% of readers found this page helpful

Author information

Name: Pres. Lawanda Wiegand

Birthday: 1993-01-10

Address: Suite 391 6963 Ullrich Shore, Bellefort, WI 01350-7893

Phone: +6806610432415

Job: Dynamic Manufacturing Assistant

Hobby: amateur radio, Taekwondo, Wood carving, Parkour, Skateboarding, Running, Rafting

Introduction: My name is Pres. Lawanda Wiegand, I am a inquisitive, helpful, glamorous, cheerful, open, clever, innocent person who loves writing and wants to share my knowledge and understanding with you.