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


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.

Here is how to calculate it.

Prerequisites: Microsoft Excel

Step 1. Launch Excel and open your spreadsheet.

open spreadsheet in Excel

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

type in values

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”.

type in formula and hit enter

Result: You have successfully calculated the Compound Annual Growth Rate in Excel.