A 100 percent increase over five years is a compound annual growth rate of approximately 15 percent a year. How would i find the percent needed? (10 * 1.15)5 = 20 is correct but how do i get the %? Thanks.
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A 100 percent increase over five years is a compound annual growth rate of approximately 15 percent a year. How would i find the percent needed? (10 * 1.15)5 = 20 is correct but how do i get the %? Thanks.
I think i have it.
% CAGR = ((Ending Value / Initial Value) ^ ( 1 / # of periods) - 1) * 100
((20/10) ^ (1/4)-1) *100 = 59.5
59.5/4 = 14.9%
Is there a simpler way to find out the % needed to double a know value over a period of time? (10 * x)5 = 20
base * (1+interest)^years = total
1 * (1+x)^5 = 2
1 + x = 2 ^ (1/5)
x = 2 ^ (1/5) - 1 =~ .1487 = 14.87%
Seems pretty clear except for the line.
base * (1+interest)^years = total
1 * (1+x)^5 = 2
1 + x = 2^(1/5)
x = 2 ^ (1/5) - 1 =~ .1487 = 14.87%
I understand that you have to shift everything to one side to isolate x
but how is the power shifted? if the power is ^ 5 why does it end up being ^ 1/5? Thanks for the help. :thumb:
A power of 1/5 is the same as the fifth root!
So you have (a)^5=b , take the fifth root of both and you have
a=(b)^1/5.
Ah ok i see now. Pretty cool. :lol: