How to Calculate Expected Growth Rate in Excel

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Expected Growth Rate (CAGR) Calculator

Beginning Value (Initial Amount)

Ending Value (Final Amount)

Number of Periods (Years, Months, etc.)

The Expected Annual Growth Rate (CAGR) is:

Expected growth rate, often referred to as the Compound Annual Growth Rate (CAGR), represents the mean annual growth rate of an investment over a specified period of time longer than one year. Excel provides several robust methods to calculate this metric accurately.

Method 1: The Manual Mathematical Formula

The standard formula for growth rate is: ((Ending Value / Beginning Value)^(1 / Number of Periods)) – 1. In Excel, you can translate this directly using cell references.

=((B2/A2)^(1/C2))-1

Where B2 is your final value, A2 is your starting value, and C2 is the number of years or periods.

Method 2: Using the RRI Function

The RRI function is specifically designed to return an equivalent interest rate for the growth of an investment. It is the cleanest way to find the expected growth rate.

=RRI(nper, pv, fv)

nper: The number of periods.
pv: Present value (beginning value).
fv: Future value (ending value).

Method 3: Using the RATE Function

If you have regular payments occurring, you might use the RATE function, but for simple growth, it looks like this:

=RATE(nper, , -pv, fv)

Note the negative sign before the pv (Present Value) to represent an initial cash outlay.

Realistic Example

Scenario	Start Value	End Value	Time	Expected Growth Rate
Revenue Growth	500,000	1,200,000	4 Years	24.47%
Stock Investment	10,000	18,500	10 Years	6.35%
User Base	50	1,000	2 Years	347.21%

Common Troubleshooting

When calculating growth rates in Excel, ensure that the Number of Periods is never zero, as this will result in a #DIV/0! error. Additionally, if you are using the manual formula, remember to format the cell as a "Percentage" to see the result clearly (e.g., 0.15 will display as 15%).

function calculateGrowthRate() { var beg = parseFloat(document.getElementById("beginningValue").value); var end = parseFloat(document.getElementById("endingValue").value); var per = parseFloat(document.getElementById("numPeriods").value); var display = document.getElementById("growth-result-area"); var output = document.getElementById("growth-output"); var logic = document.getElementById("logic-explanation"); if (isNaN(beg) || isNaN(end) || isNaN(per) || per <= 0 || beg <= 0) { alert("Please enter valid positive numbers. Number of periods must be greater than zero."); return; } // CAGR Formula: ((FV / PV) ^ (1 / n)) – 1 var growthRate = (Math.pow((end / beg), (1 / per)) – 1); var growthPercent = (growthRate * 100).toFixed(2); output.innerHTML = growthPercent + "%"; logic.innerHTML = "Based on an initial value of " + beg + " growing to " + end + " over " + per + " periods."; display.style.display = "block"; }

Expected Growth Rate (CAGR) Calculator