**Finding Growth Rate Between Two Numbers**

**This is a very simple and useful way to determine the growth rate between two numbers. Let's say we started with an initial investment of $100. A year later we find our investment is now worth $123, and we'd like to know the growth rate.**

**Step 1.**Divide the most recent number by the older number. In this case, $123 is the most recent number, so we'll divide that number by $100, which is the older number. Our answer is 1.23.**Step 2.**Now we'll multiply that answer times 100 as in (1.23 x 100). That step will give us an answer of 123.__Note:__In this step, all we've really done is move the decimal point of your original answer two places to the right.**Step 3.**Now we'll subtract 100 from 123, and attach the % sign. Our answer is 23%. Our initial investment of $100 gained 23% over one year.

**Occasionally, the value of an investment, any investment, may decline, and even though it may be an unpleasant event, we still need to know the decline rate so we can make an intelligent decision on what to do next. Will the same three steps we used above still work? The answer is YES. Let's have a look.**

**We'll start with the same $100 investment. A year later we find the value of the investment in now $83. We did our analysis, and we know the investment is fundamentally sound, so we attribute the loss to a temporary event, and we plan to hold the investment, still, we'd like to know the loss rate. We'll use the exact same three steps as above.**

**Step 1.****Divide the most recent number by the older number. In this case, $83 is the most recent number, so we'll divide that number by $100, which is the older number. Our answer is 0.83.**

**Step 2.****Just like step 2 above, we'll multiply the answer times 100 as in (0.83 x 100). That step will give us an answer of 83.**

**Step 3.****Now, just like step 3 above, we'll subtract 100 from 83, and attach the % sign. Our answer is -17%. Our initial investment of $100 has produced a negative growth of 17%, or -17%.**

This method always works, whether our investment has a positive or negative growth.

This method always works, whether our investment has a positive or negative growth.

**Just remember, divide the newest number by the older number, multiply times 100, then subtract 100 and attach the % sign.**

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