Average annual growth rate (AAGR) calculates average annual growth rate from time series based on the formula:
(grow rate during period 1 + grow rate during period 2 + grow rate during period 3 + …………+ grow rate during period n ) / number of periods of grow
in the denominator is not the number of periods covered but number of periods of grow!
→ 4 periods, but 3 periods of grow
Average annual growth rate (AAGR) between 2015 and 2010 is thus calculated as (0,13 + 0,06 + 0,00 + 0,11 + 0,05) / 5 = 0,07 (7%).
AAGR therefore considers also the movements within the considered time series. This may cause problems if the values inside the time range fluctuate. In this case, straight-line growth rate may be more appropriate.