How would you calculate annualised percentage increase?

if you already knew a company's revenues for a 5 year period how would calculate the annualised percentage increase throughout that period?



Say the revenues were: Yr 1-拢10m Yr 2-拢11.3m Yr 3-拢13.5m Yr 4-拢15m Yr 5-拢15.5mHow would you calculate annualised percentage increase?
You can calculate the increase by dividing the year value by the preceeding year. So to calculate the increase from year 1 to 2 you would do



Year 2/ Year 1 = 11.3 / 10 = 1.13 = 13%. The value after the decimal point is the % increase.You could get to this by subtracting 1 and multiplying by 100 so



1.13 - 1 = 0.13

0.13 * 100 = 13



Over the 5 year period you have an increase of 55%How would you calculate annualised percentage increase?
If the revenue really grew at a (constant) annual rate r, then the fifth year revenue would be:



(Yr 5) = (Yr 1) * (1 + r)^4



Solve for r:



(1 + r)^4 = (Yr 5)/(Yr 1) = 15.5/10 = 1.55

1 + r = 1.55 ^ (1/4) ~~ 1.1158

r ~~ 0.1158 or about 11.58%.



Note that only the starting and ending revenues are used, along with the number of years between. Also note that this is not a good fit to the data, since the growth from year 4 to year 5 was only about 3.33%.

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