CAGR

[saeedmahmoodraja]

Is there any built-in function for CAGR calculations in
EXCEL? This is very commonly used formula in the
financial industry.

 

[Dave R.]

http://tinyurl.com/3437c

 

[Norman Harker]

Hi Saeedmahmoodraja!

For built in function for CAGR see RATE

To get the rate in annual terms the NPer argument would need to be in
years.

Example:

1000 grows to 3000 in 9 years:

=RATE(9,0,-1000,3000,0,0)
Returns: 12.9830963909752%

But for formula approach:
=(3000/1000)^(1/9)-1
Returns: 12.9830963909753%

If fractions of a year are involved you might use the XIRR function:

Where
B4: -1000
B5: 3000
A4: 23-Jan-1995
A5: 18-May-2004
=XIRR(B4:B5,A4:A5,0)
Returns: 12.5058784179688%