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I am trying to create a formula to calculate the growth rate for a balance.

My variables are as follows:
$B{\scriptsize0} =$ beginning balance
$A =$ Dollar Increase for a given month
$D{\scriptsize1} =$ Dollar Decrease for a given month
$D{\scriptsize2} =$ A second (separate) Dollar Decrease for a given month
$B{\scriptsize1} =$ Ending balance.

For a single month I would calculate $B{\scriptsize1}$ as:

$$B{\scriptsize0} + A - D{\scriptsize1} - D{\scriptsize2} = B{\scriptsize1}$$

If I calculate new variables as percentages of$B{\scriptsize0}$ (for example, $A{\scriptsize p} = A / B{\scriptsize0}$) I would like to be able to plug these percentages into a formula and get the expected growth rate over a 12 month period.

In other words, $GIVEN: A{\scriptsize p}, D{\scriptsize 1p}, D{\scriptsize 2p}$ and $B{\scriptsize0}$ how can I find the growth rate?

I'm not certain how to tag this question, I'd appreciate if someone tagged it appropriately.

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up vote 0 down vote accepted

Well, I think I figured it out:

$$( (1 + A{\scriptsize p} - D{\scriptsize 1p} - D{\scriptsize 2p})^n - 1)* 100$$

where $n =$ number of months for which to calculate the total growth.

Since I was interested in the % growth over a year I used $n = 12$.

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