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Aug 29, 2024 · Learn the concept of CAGR (Compound Annual Growth Rate) and how to calculate it in Excel using different functions. See examples, formulas, and tips for smoothing out the annual growth of an investment over time.
Note: in other words, to calculate the CAGR of an investment in Excel, divide the value of the investment at the end by the value of the investment at the start. Next, raise this result to the power of 1 divided by the number of years.
Nov 2, 2023 · Calculating CAGR in Excel . The math formula is the same as above: You need ending values, beginning values, and a length measured in years. Excel has a built-in formula, but it’s far from ideal
May 3, 2023 · Learn what Compound Annual Growth Rate (CAGR) is and how to make a CAGR formula in Excel using four different methods: generic formula, RRI function, POWER function, and RATE function. See examples, screenshots, and tips for calculating CAGR in Excel.
- Svetlana Cheusheva
- CAGR formula in Excel. The basic CAGR formula is : CAGR = (EV ÷ BV) ^ (1 ÷ n) – 1. EV = Ending Value. BV = Beginning Value. n = Periods between Beginning and Ending.
- RRI function. There is an easier option than the generic CAGR formula, the RRI function. The RRI function in Excel calculates the interest rate for the growth of an investment.
- RATE function. A similar and related function to RRI is the RATE function. The RATE function in Excel calculates the interest rate per period of a loan or investment.
- POWER function. We’ve seen that RATE and RRI are built-in Excel functions that replicate the basic CAGR formula. We don’t see how those functions work; we just trust that Excel calculates the result as expected.
Feb 9, 2023 · Instead of using the Rate Function, you can use the IRR Function to calculate the CAGR for periodic cash flows. The IRR Function works the same as the XIRR Function, except you don't need to specify dates. =IRR(B5:B10,.25) Result: 8% Apply Percentage Formatting to CAGR. After you finish calculating CAGR, your result may appear as a decimal: ex ...
Jun 7, 2022 · To calculate CAGR, you first divide the future value by the present value. Then, raise the result to an exponent of one divided by the number of periods (years). Finally, subtract one from the result. Here is the formula for CAGR using our above example and cell references in Excel: =(B7/B2)^(1/A7)-1. As you can see in the screenshot below ...