The formula used by BEA to calculate the average annual growth is a variant of the compound interest formula:
where
GDPt is the level of activity in the later period;
GDP0 is the level of activity in the earlier period;
m is the periodicity of the data (for example, 1 for annual data, 4 for quarterly data, or 12 for monthly data); and
n is the number of periods between the earlier period and the later period(that is t-0).
Published