How to calculate growth

Through the concept of "growth" they analyze changes in the economy and other areas of life. If the newspapers write that milk prices have increased by 12% compared to last year, then everyone understands what this means. But not everyone knows how the specified value is calculated. But the calculation method can be used to analyze personal finances.

Instruction manual

1

Set the time interval. The growth rate a allows you to evaluate the changes that have occurred over time. Therefore, a reference point in the past and a temporary point recorded in the present are needed. Suppose we need to compare wage growth by July 2005, starting in July 2004, that is, over the year.

2

Define indicators for the beginning and end. Suppose that in July 2004 the salary received on hand was 15 thousand rubles. And in July 2005, the salary was 18 thousand rubles.

3

Subtract the initial from the final indicator. We subtract from 18 thousand 15 thousand rubles, we get 3 thousand rubles.

4

Divide the obtained value by the initial indicator. We divide 3 thousand into 15 thousand rubles, we get 0.2.

5

Multiply the total by 100%. We multiply 0.2 by 100, we get 20%. Thus, over the year, wage growth amounted to 20%. They also say that "wages increased by 20%."

note

The gain may be negative. If at the end of the period the salary amounted to 14 thousand rubles, then at the 3rd step we subtract from 14 thousand 15 thousand rubles, we get -1 thousand rubles.

Then at the 4th step we divide -1 thousand by 15 thousand rubles, we get about -0.07. And at the 5th step we multiply this value by 100, we get -7%. We have a negative increase, that is, wages for the period under review decreased by about 7%.

Useful advice

After the calculations, check yourself that there are no errors. If you add 20% to the 15000 on the calculator, the calculator will show 18000. This means that the growth is determined correctly.

The concept of growth is used in the evaluation of activities