You are trying to manage expenses, and decide that you will allow them to grow only 7% this year. Assuming you want a level (the same) monthly growth rate for each month, what will be the monthly growth rate that the 7% annual rate allows? EXAMPLE: A 2% growth rate for the year would require 1.02 = (1 + r)12. Solve this for r: ; r = .00165 or .165% per month on average.