is there a function to work out Compound annual growth rate?

bartoni

Active Member
Hi,

is there a function to work out Compound annual growth rate?

Thanks

Excel Facts

Test for Multiple Conditions in IF?
Use AND(test, test, test, test) or OR(test, test, test, ...) as the logical_test argument of IF.
Hi Bartoni,

I believe the formula is i = (P/P0)^(1/n) - 1

where n is the number of years over which the growth as occurred, P is the ending principle, P0 is the beginning principle.

Just as an example if P0 = \$1000, P = \$1500, n = 5 years, the effective annual interest rate would be 8.4%.

Note that n can include partial years.

Keep Excelling.

Damon

Thanks
is there a function that performs this?

You can use the RATE function like this:
CAGR.XLS
ABCD
1
2CAGR
3
4Rate5.0%
519911,234
619921,296=C5*(1+C\$4)
719931,360=C6*(1+C\$4)
819941,429=C7*(1+C\$4)
919951,500=C8*(1+C\$4)
10Years4=B9-B5
11CAGR5.0%=(C9/C5)^(1/C10)-1
12CAGR5.0%=RATE(C10,,-C5,C9)
Sheet1

The formula in C11 (like Damon's) is:

=(C9/C5)^(1/C10)-1

The formula in C12 is:

=RATE(C10,,-C5,C9)

bartoni.

didn't know about the rate function, but since i wrote this, you might as well have it

ben.
Code:
``````Function CAGR(InitialValue As Range, EndValue As Range, Years As Tange, Optional TrailingZeroes As Integer = -999)

If TrailingZeroes = -999 Then TrailingZeroes = 1

If TrailingZeroes > 13 Then
MsgBox "Accuracy is limited to 13 digits"
TrailingZeroes = 13
End If

CAGR = FormatPercent((EndValue / InitialValue) ^ (1 / Years) - 1, TrailingZeroes)

End Function``````
book1
ABCD
1InitialValueEndValueYearsCAGR
21000020000515%
31000020000514.9%
41000020000514.87%
51000020000514.870%
Sheet1

Replies
2
Views
89
Replies
4
Views
136
Replies
2
Views
238
Replies
1
Views
129
Replies
1
Views
112

1,196,254
Messages
6,014,270
Members
441,810
Latest member
LouLou1234

We've detected that you are using an adblocker.

We have a great community of people providing Excel help here, but the hosting costs are enormous. You can help keep this site running by allowing ads on MrExcel.com.

1)Click on the icon in the browser’s toolbar.
2)Click on the icon in the browser’s toolbar.
2)Click on the "Pause on this site" option.
Go back

1)Click on the icon in the browser’s toolbar.
2)Click on the toggle to disable it for "mrexcel.com".
Go back

Disable uBlock Origin

Follow these easy steps to disable uBlock Origin

1)Click on the icon in the browser’s toolbar.
2)Click on the "Power" button.
3)Click on the "Refresh" button.
Go back

Disable uBlock

Follow these easy steps to disable uBlock

1)Click on the icon in the browser’s toolbar.
2)Click on the "Power" button.
3)Click on the "Refresh" button.
Go back