Compounded Annual Growth Rate (CAGR)

  • Thread starter Thread starter deacs
  • Start date Start date
D

deacs

Hi,

Is there a formula in Excel that returns the Compounded Annual Growt
Rate(CAGR)? For example, I have a column with Yearly $ amounts with 1
years of data. With a financial calculator, if I have the starting
amount, the ending $ dollar amount and the number of years(or periods)
I can calculate the CAGR. Can Excel do something similar with the data


Thanks
 
Deacs,

If you want the annualized rate, and have the start and end values, use:

=(EndValue/StartValue)^(1/Years)

If these values are in cells, it might look like:

=(B2/B1)^(1/B3)
 
If you prefer functions, the one to use is Rate.

If you have irregular cash flows, then use XIRR.

--
Regards,
Fred
Please reply to newsgroup, not e-mail


Earl Kiosterud said:
Deacs,

If you want the annualized rate, and have the start and end values, use:

=(EndValue/StartValue)^(1/Years)

If these values are in cells, it might look like:

=(B2/B1)^(1/B3)
Click to expand...
 
Hi Earl!

Minor correction to base formulas for CAGR (you need to deduct 1 in
both cases)

=(EndValue/StartValue)^(1/Years)-1

=(B2/B1)^(1/B3)-1

--
Regards
Norman Harker MVP (Excel)
Sydney, Australia
(e-mail address removed)
Excel and Word Function Lists (Classifications, Syntax and Arguments)
available free to good homes.
Earl Kiosterud said:
Deacs,

If you want the annualized rate, and have the start and end values, use:

=(EndValue/StartValue)^(1/Years)

If these values are in cells, it might look like:

=(B2/B1)^(1/B3)
Click to expand...
 
Back
Top