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.

**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.