Calculating a percentile change in a number is straightforward; calculating the average of a set of numbers is also a familiar task for many people. But what about calculating the average percent change of a number that changes more than once?
For example, what about a value that is initially 1,000 and increases to 1,500 over a five-year period in increments of 100? Intuition might lead you to the following:
The overall percent increase is:
Or in this case,
So the average percent change must be
...right?
As these steps show, this is not the case.
Step 1: Calculate the Individual Percent Changes
For the above example, we have
The trick here is recognizing that the final value after a given calculation becomes the initial value for the next calculation.
Step 2: Sum the Individual Percentages
Step 3: Divide by the Number of Years, Trials, Etc.
References
About the Author
Kevin Beck holds a bachelor's degree in physics with minors in math and chemistry from the University of Vermont. Formerly with ScienceBlogs.com and the editor of "Run Strong," he has written for Runner's World, Men's Fitness, Competitor, and a variety of other publications. More about Kevin and links to his professional work can be found at www.kemibe.com.