Compounded rate of return on land?

[gidsy]

Hi There,

I am trying to work out the best way to return the Compounded rate of return for the increase in land value.

So for a property purchased for 64,000 35 years ago is now worth 1,900,000. That's an increase of 52,457 pa. What is the Compounded rate of return?

There must be a function, I just can't find it.

Thanks in advance

 

[acw]

Hi

Compound Annual Growth Rate (CAGR)

(Vtn/Vt0)^(1/tn)-1

Where Vtn is the value at time n (1900000)
Vt0 is the starting value (64000)
tn is the number of years (35)

I get 10.17%

HTH

Tony

 

[gidsy]

Thanks for that....Is that a standard function...I do not have that one...I'm on version 2002

 

[acw]

Hi

I just gave you the formula required to calculate from the data given. If you look up compound annual growth rate in Excel help, it will give you the XIRR function, but I don't think it will work for you example data.


Tony