Compounded Annual Growth Rate (CAGR)

[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

 

[Earl Kiosterud]

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)

 

[Fred Smith]

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

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)

 

[Norman Harker]

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.

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)