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### Kutools for Excel 22.00HOT

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## How to calculate average/compound annual growth rate in Excel?

#### Calculate Compound Annual Growth Rate in Excel

To calculate the Compound Annual Growth Rate in Excel, there is a basic formula =((End Value/Start Value)^(1/Periods) -1. And we can easily apply this formula as following:

1. Select a blank cell, for example Cell E3, enter the below formula into it, and press the Enter key. See screenshot:

=(C12/C3)^(1/(10-1))-1

Note: In the above formula, C12 is the cell with end value, C3 is the cell with start value, 10-1 is the period between start value and end value, and you can change them based on your needs.

2. In some cases, the calculation result may not format as percentage. Please keep selecting the calculation result, click the Percent Style button  on the Home tab to change the number to percentage format, and then change its decimal places with clicking the Increase Decimal button  or Decrease Decimal button . See screen shot:

#### Calculate compound annual growth rate with XIRR function in Excel

Actually, the XIRR function can help us calculate the Compound Annual Growth Rate in Excel easily, but it requires you to create a new table with the start value and end value.

1. Create a new table with the start value and end value as the following first screen shot shown:

Note: In Cell F3 enter =C3, in Cell G3 enter =B3, in Cell F4 enter =-C12, and in Cell G4 enter =B12, or you can enter your original data into this table directly. By the way, you must add a minus before the End Value.

2. Select a blank cell below this table, enter the below formula into it, and press the Enter key.

=XIRR(F3:F4,G3:G4)

3. For changing the result to percentage format, select the Cell with this XIRR function, click the Percent Style button  on the Home tab, and then change its decimal places with clicking the Increase Decimal button  or Decrease Decimal button . See screen shot:

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#### Calculate Average Annual Growth Rate in Excel

To calculate the Average Annual Growth Rate in excel, normally we have to calculate the annual growth rates of every year with the formula = (Ending Value - Beginning Value) / Beginning Value, and then average these annual growth rates. You can do as follows:

1. Besides the original table, enter the below formula into the blank Cell C3 and, and then drag the Fill Handle to the Range C3:C11.

=(C4-C3)/C3

2. Select the Range D4:D12, click the Percent Style button  on the Home tab, and then change its decimal places with clicking the Increase Decimal button  or Decrease Decimal button . See screenshot:

3. Average all annual growth rate with entering below formula into Cell F4, and press the Enter key.

=AVERAGE(D4:D12)

Up to now, Average Annual Growth Rate has been calculated and shown in the Cell C12.

#### Demo: calculate average/compound annual growth rate in Excel

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• To post as a guest, your comment is unpublished.
· 5 days ago
How to calculate average of percentage CAGR Return ?
Example :

28.6%
34.9%
25.5%
-2.8%
16.0%
• To post as a guest, your comment is unpublished.
· 6 months ago
You can also just use the RATE() formula with setting PMT to 0. RATE(9,0,-549,987) = 6.73%. Built right into Excel already.
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· 1 years ago
Your period is wrong in CAGR formula ?
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· 8 months ago
I agree, there's only 9 periods from 1/1/11 to 1/1/20. Ten periods would be 1/1/11 to 12/31/20. Please explain
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· 1 years ago
Hi - I'm trying to work backwards to find the highest price I can buy a share at when I have a total expected return. Are you able to please help me by reverse engineering the formula to work this out. Using your example - I'm trying to work out what the "3" should be 2.43443 =(3200/x)^(1/(40-8))-1
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· 2 years ago
Hi,

I have 7 fiscal years of foot traffic data for a retail store:

FY12 FY13 FY14 FY15 FY16 FY17 FY18
2653 2848 2871 2925 2685 2923 3000

My question is: while traffic is increasing, is it increasing at a decreasing rate? Is the growth slowing?

Your first example "(B11/B2)^(1/(10-1))-1" takes the end value and beginning value to get the CAGR. The part I don't understand is that, what about the values in the middle? How does only taking the end and beginning value determine the growth rate accurately? Is there another method where it takes all the fiscal year values into account?
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· 2 years ago
FY12 - 2653
FY13 - 2848
FY14 - 2871
FY15 - 2925
FY16 - 2685
FY17 - 2923
FY18 - 3000
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· 2 years ago
Hi Robert,
You can use this formula = (Ending Value - Beginning Value) / Beginning Value to calculate the growth rate of each year, and then compare those growth rates one by one.
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· 2 years ago
Can someone help with this problem using excel?

The following data show average growth of the human embryo prior to birth.
EMBRYO AGE IN WEEKS WEIGHT IN GRAMS
8 3
12 36
20 330
28 1000
36 2400
40 3200

a). Find the quadratic function of “best fit” for this data. Write this function in standard form: f(x) = ax2 + bx + c.
b). Make a sketch of the scatter plot and the parabola. Plot the quadratic function found above the Y = menu.
c). According to your model, what would a 32-week embryo weigh?
d). According to your model, what week would an embryo weigh 3000 grams?
e). Could the model be used for weight of an embryo for any number of weeks age (such as 100 or 200)? Explain
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· 2 years ago
Hi Wayne,
You can calculate the Compound Annual Growth Rate with the second method:
=(3200/3)^(1/(40-8))-1
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· 2 years ago
There is a new tool that will fit to your planning software.
MS Excel is a spreadsheet developed by Microsoft for Windows, macOS, Android and iOS.
It features calculation, graphing tools, pivot tables, and a macro programming language called Visual Basic for Applications.
Thus, it can do Bookkeeping/Accounting, Budgeting (Existing Year and Long Term) and Data Analysis.
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· 3 years ago
In the CAGR formula, why we are using -1 at the end.
I am using two formulaes 1) (I5/I4)^(1/(25-1))-1
2)(I5/I4)^(1/(25)-1) which one is correct..?
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· 3 years ago
The first formula you are using is the correct one!
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· 3 years ago
The formula is actually CORRECT, but the explanation is incorrect. There are 10 dates that represent 9 periods. It should say that "n-1" means "dates-1", not "periods - 1".

You can verify it yourself by increasing each year by this example's n-1 CAGR and you will get the final result.
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· 3 years ago
The original formula is CORRECT, but its explanation is wrong; It confuses the number of dates shown with the number of periods. In the example, there are ten dates listed but they extend over only 9 years (periods). That is why there is a minus 1.Try it yourself by calculating each year's increase at the CAGR of 6.5257% and you will get the correct ending answer.
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· 8 months ago
thank you. Strange only two others seem to have noticed this. I'd like to know why doesn't the formula just say to put in the actual number of periods, such as the 9 periods shown instead of ten minus one? Actually gave the correct formula n=number of periods) which is smart, because then eveeryone can use it for say 4/1/xx to 9/31/xx and actually list the number of periods in years with a decimal to represent the part of the year related to thte number of months between the beginning of April to the end of Sept
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· 3 years ago
As noted above, this formula is INCORRECT and misleading (especially since it's the first Google result). Please correct!
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· 3 years ago
I need the amount \$20,000 @ 8% & 10% would be after 30 years compounded growth please. Thank you, Ramsy
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· 3 years ago
Agree with MANOJ - the formula is wrong. it is not n-1
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· 3 years ago
Hi Bro,

Your Formula for CAGR: [quote][b]=((End Value/Start Value)^(1/(Periods - 1)) -1[/b] [/quote] highlighted in blue is incorrect.

The correct CAGR formula is:

= ((FV/PV)^(1/n)) - 1

Where,
FV: Future Value
PV: Present Value
n: Number of years
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· 1 months ago
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