Need someone to check my math. I followed the formula for average growth rate in the post here. I have five years of data. The values for the first and last years are:
2007: 1,292
2011: 1,097
I calculate an average growth rate of -4.01%. Is that correct?
I thought I had accounted for the change period. Here is the formula I used in Excel:
=EXP(LN(I7/E7)/(COUNT(E7:I7)-1))-1
If I plug in the numbers, then the formula is:
=EXP(LN(1097/1292)/4)-1
which gives a rate of -4.01%. Or am I doing something wrong?
You have the correct answer. To double check you can use Excel to give the numbers for 2008, 2009, and 2010 as well, and using a calculated growrth rate of -4.008% what I find is:
2007: 1292
2008: 1240.2
2009: 1190.5
2010: 1142.8
2011: 1097