Calculate Cagr in Excel

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CAGR Calculator (Compound Annual Growth Rate)

Calculate your investment growth rate and get the exact Excel formula.

Your Compound Annual Growth Rate is:
0%
Excel Formula to use:

How to Calculate CAGR in Excel

Compound Annual Growth Rate (CAGR) is the best way to determine the return on an investment that fluctuates in value over time. While Excel doesn't have a "CAGR" button, you can calculate it easily using basic math formulas or built-in functions.

Method 1: The General Formula

The mathematical formula for CAGR is: ((Ending Value / Beginning Value) ^ (1 / Number of Years)) - 1.

In Excel, if your values are in cells A1 (Beginning), B1 (Ending), and C1 (Years), you would enter:

=(B1/A1)^(1/C1)-1

Method 2: Using the RRI Function

Excel provides the RRI function specifically for calculating CAGR. The syntax is:

=RRI(number_of_periods, pv, fv)
  • number_of_periods: The total number of years or periods.
  • pv: Present Value (Beginning Value).
  • fv: Future Value (Ending Value).

Example Calculation

Suppose you invested $5,000 in a stock portfolio in 2018. By 2023 (5 years later), the portfolio is worth $8,500. To find the CAGR:

  • Beginning Value: 5000
  • Ending Value: 8500
  • Years: 5
  • Calculation: ((8500 / 5000) ^ (1 / 5)) – 1 = 11.2%

This means your investment grew at a compounded rate of 11.2% every year for five years.

Why CAGR Matters

Unlike simple average returns, CAGR accounts for the compounding effect. It smoothes out the volatility of annual returns to provide a single number that represents the annual growth rate as if the investment had grown at a steady rate each year.

function calculateCAGR() { var startValue = parseFloat(document.getElementById('startValue').value); var endValue = parseFloat(document.getElementById('endValue').value); var periods = parseFloat(document.getElementById('numPeriods').value); var resultBox = document.getElementById('cagrResultBox'); var resultDisplay = document.getElementById('cagrResultDisplay'); var excelDisplay = document.getElementById('excelFormulaDisplay'); if (isNaN(startValue) || isNaN(endValue) || isNaN(periods) || startValue <= 0 || periods <= 0) { alert("Please enter valid positive numbers. Beginning Value and Years must be greater than zero."); resultBox.style.display = "none"; return; } // CAGR Calculation: ((End / Start)^(1 / n)) – 1 var cagr = (Math.pow((endValue / startValue), (1 / periods)) – 1); var cagrPercentage = (cagr * 100).toFixed(2); resultDisplay.innerText = cagrPercentage + "%"; // Generate Excel Formula suggestion based on user inputs var excelFormula = "=RRI(" + periods + ", " + startValue + ", " + endValue + ")"; excelDisplay.innerText = excelFormula; resultBox.style.display = "block"; }

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