How do you calculate the percentage increase in value per year of something $350 to $800 in 7 years?

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Answer 1 · 2018-05-08T21:21:53

$12.54 %$ $12.54%$ per year.

We could use the formula for compound interest.

$F V = P V {(1 + \frac{r}{n})}^{n t}$ $FV=PV(1+r/n)^(nt)$

Where:

FV = future value.

PV = present value.

$r =$ $r=$ interest rate given as a decimal.

$n =$ $n=$ number of compounds per year.

$t =$ $t=$ number of years.

We have:

$P V = 350$ $PV = 350$

$F V = 800$ $FV=800$

We will assume that this is compounded annually.

$350 {(1 + \frac{r}{1})}^{7} = 800$ $350(1+r/1)^7=800$

${(1 + \frac{r}{1})}^{7} = \frac{800}{350} = \frac{16}{7}$ $(1+r/1)^7=800/350=16/7$

$r = \sqrt[7]{\frac{16}{7}} - 1 \approx 0.125353197$ $r=root(7)(16/7)-1~~0.125353197$

This is in decimal form, so.

$12.54 %$ $12.54%$ per year. 2 d.p.