Rate of Growth (CAGR) Calculator & Excel Guide
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Rate of Growth Calculator (CAGR)
Beginning Value
Ending Value
Number of Periods (n)
Calculate Growth Rate
Compound Annual Growth Rate (CAGR)
0.00%
Absolute Change:
0
Total Percentage Growth:
0.00%
Excel Formula for this Calculation:
=RRI(5, 10000, 25000)
Or manually: =(25000/10000)^(1/5)-1
How to Calculate Rate of Growth in Excel
Calculating the rate of growth is a fundamental task in financial analysis, data science, and business reporting. Whether you are tracking revenue, population changes, or investment returns, knowing how to determine the growth rate over specific periods is essential. While the calculator above gives you an instant answer, understanding how to calculate the rate of growth in Excel allows you to handle large datasets efficiently.
Understanding the Growth Rate Formula
When analysts refer to the "Rate of Growth" over multiple periods, they are typically referring to the CAGR (Compound Annual Growth Rate) . This differs from simple percentage growth because it smooths out the volatility of growth over time, providing a geometric mean return.
Growth Rate = (Ending Value / Beginning Value)(1 / n) – 1
Where:
Ending Value: The value at the end of the period.Beginning Value: The value at the start of the period.n: The number of periods (years, months, days).
Method 1: Using the RRI Function in Excel
The easiest way to calculate the Compound Annual Growth Rate in Excel is by using the built-in RRI function. This function returns an equivalent interest rate for the growth of an investment.
Syntax: =RRI(nper, pv, fv)
nper: The number of periods.pv: Present Value (Beginning Value).fv: Future Value (Ending Value).
Example: If you started with 100 users and grew to 500 users over 3 years, the formula would be:
=RRI(3, 100, 500)
This will return roughly 0.7099, or 70.99% .
Method 2: Using the Power Formula (Manual Calculation)
If you prefer not to use the RRI function, or if you are using an older version of Excel, you can use the mathematical formula manually using the caret (^) symbol for exponents.
Excel Formula: =(Ending_Cell / Beginning_Cell)^(1 / Periods_Cell) - 1
Step-by-Step Example:
Enter the Beginning Value in cell A1 (e.g., 50000).
Enter the Ending Value in cell B1 (e.g., 85000).
Enter the number of years in cell C1 (e.g., 5).
In cell D1, enter: =(B1/A1)^(1/C1)-1
Format cell D1 as a Percentage (Ctrl + Shift + %).
Calculating Simple Growth Rate (Period over Period)
If you only have two data points and want to know the total percentage change (not the annualized compound rate), the formula is much simpler:
=(Ending Value – Beginning Value) / Beginning Value
In Excel, if A1 is your start value and B1 is your end value, the formula is =(B1-A1)/A1.
Common Errors to Watch For
#NUM! Error: This often happens if the Beginning Value or Ending Value is negative. The standard CAGR formula generally requires positive numbers.#DIV/0! Error: This occurs if your Beginning Value is 0. Mathematical growth from zero is undefined.Formatting: Always remember to format your result cells as "Percentage" in Excel to make them readable.
function calculateGrowthRate() {
// 1. Get Input Values
var startVal = document.getElementById('rog_start_val').value;
var endVal = document.getElementById('rog_end_val').value;
var periods = document.getElementById('rog_periods').value;
// 2. Validate Inputs
if (startVal === "" || endVal === "" || periods === "") {
alert("Please fill in all fields (Beginning Value, Ending Value, and Periods).");
return;
}
var start = parseFloat(startVal);
var end = parseFloat(endVal);
var n = parseFloat(periods);
if (isNaN(start) || isNaN(end) || isNaN(n)) {
alert("Please enter valid numeric values.");
return;
}
if (start === 0) {
alert("The Beginning Value cannot be zero when calculating growth rates (division by zero).");
return;
}
if (n === 0) {
alert("The Number of Periods cannot be zero.");
return;
}
// 3. Perform Calculations
// CAGR Logic: (End / Start)^(1/n) – 1
// Using Math.pow(base, exponent)
var cagrDecimal = Math.pow((end / start), (1 / n)) – 1;
var cagrPercent = cagrDecimal * 100;
// Total Growth Logic: (End – Start) / Start
var totalGrowthDecimal = (end – start) / start;
var totalGrowthPercent = totalGrowthDecimal * 100;
// Absolute Change
var absChange = end – start;
// 4. Update UI with Results
var resultDiv = document.getElementById('rog_result');
resultDiv.style.display = 'block';
document.getElementById('rog_final_rate').innerText = cagrPercent.toFixed(2) + "%";
document.getElementById('rog_abs_change').innerText = absChange.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('rog_total_growth').innerText = totalGrowthPercent.toFixed(2) + "%";
// 5. Update Excel Formula Snippet for User
document.getElementById('excel_formula_display').innerText = "=RRI(" + n + ", " + start + ", " + end + ")";
document.getElementById('manual_excel_display').innerText = "=(" + end + "/" + start + ")^(1/" + n + ")-1";
}