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How to Calculate the Compound Annual Growth Rate, or CAGR, in Microsoft Excel

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Rating: 4.0; Vote: 1

In this tutorial you will learn how to calculate the compound annual growth rate, or CAGR, in Microsoft Excel. Compound Annual Growth Rate is a financial statistical function that measures the rate of return on investment over a specified period of time. Its formula is: Here is how to calculate it. Prerequisites: Microsoft Excel Step 1. Launch Excel and open your spreadsheet. Step 2. Type in the value of initial amount of investment in the first cell - A Type in the value of final amount of investment in the second cell - B Type the number of years in the third cell - C Step 3. Go to the cell where you want to place the result, and type in the formula: = (B/A(1/C)-1. Hit Enter. Result: You have successfully calculated the Compound Annual Growth Rate in Excel
Date: 2023-07-08

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Comments and reviews: 2

Bob
It's not (B/A) over bracket 1 over C, but rather (B/A) raised to the (1/C) power, over implies division. Also a minor point but probably better to refer to them as parens or parentheses rather than brackets, a brackets look like this: [ ]
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Michael
So far, so good. But, for the dummies among us:
1. You might want to explain how to do portions of years, and
2. How to turn it into a proper percentage (use the format cell percentage thingy)
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