Yearly Growth Rate Calculator
Calculate your annual progress and get the exact Excel formulas needed.
How to Calculate Yearly Growth Rate in Excel
Calculating the yearly growth rate is essential for tracking business performance, investment returns, or any metric that changes over time. In Excel, there are three primary ways to handle this calculation depending on whether you are looking at a single year or a multi-year period.
1. The Basic Percentage Change Formula
If you want to find the growth rate between just two years, use the standard percentage change formula. In Excel, if your starting value is in cell A2 and your ending value is in cell B2, the formula is:
After entering this, format the cell as a percentage to see the rate (e.g., 0.15 becomes 15%).
2. Compound Annual Growth Rate (CAGR) Formula
When measuring growth over several years, the "Yearly Growth Rate" usually refers to the CAGR. This smooths out the growth rate to show what the annual return would have been if the value grew at a steady rate each year.
Manual Math Formula: ((Ending Value / Starting Value) ^ (1 / Number of Years)) – 1
Excel Syntax:
Where B2 is the ending value, A2 is the starting value, and C2 is the total number of years.
3. Using the RRI Function
Excel provides a built-in function specifically for calculating the growth rate of an investment over a specific period. This is the cleanest way to find the yearly growth rate:
- nper: Number of periods (years).
- pv: Present value (starting value).
- fv: Future value (ending value).
Example Calculation
Imagine your company revenue was 50,000 in 2020 and grew to 80,000 by 2023 (3 years).
- Starting Value: 50,000
- Ending Value: 80,000
- Years: 3
- Calculation: ((80,000 / 50,000) ^ (1 / 3)) – 1 = 16.96%
In Excel, you would use: =RRI(3, 50000, 80000) which returns 0.1696.