In this tutorial you will learn how to calculate the compound annual growth rate, or CAGR, in Microsoft Excel.
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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.
