Can someone give me a clearification the differences among rate, index , increasing rate and growth rete.?

Question

It would be more appreciate if you can give me examples.

Answer 1

A "growth rate" is the % change over time. For example, if you sell £1000 of goods in 2003, and £1050 in 2004, the growth in sales from one year to the next was 5%. Growth rates are often expressed as an annual average when they refer to a period of several years.

An "increasing growth rate" means that growth has got faster. If in the above example you sell £1155 of goods in 2005 you can say that growth rate of your sales "has increased from 5% in 2004 to 10% in 2005".

An "index" is a way of measuring a phenomenon by tracking a sample. One common example is an "inflation index". In its simple form you add up the prices of a range of goods on say 1st January 2001, wieghted according to how much people spent on them. Say, to simplify, the average consumer in your country bought in Jan 01 £20 of rice, £10 of petrol, £5 each on lentils, sugar, clothes, and sandals. Just to keep it simple. You weight the price of rice as 40 for your index, petrol as 20, sandals as 10 and so on. Your total weights are 100. Now you come back each January and measure prices again, and scale them according to the weights. By January 2006 you have an overall weighted rise in prices of 25%, because the index is now at 125. Petrol has doubled in price, so that alone accounts for 20 of the 25 point rise in the index. Sandals have halved in price but because they are less important to people the weighted change is only minus 5 points. And so on.

ANother place you'll often meet an index is the stock market. Share prices are weighted in proportion to the total value of all the shares of the various companies in the market. So a small rise in the price of the shares of the largest company will count for more in the index than a doubling of the price of a tiddler.

Am I making enough sense for you?

Answer 2

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thank you