An interesting problem and easy to model in Excel:

In A1 put a starting value, say 100. In B1 we put a random sample from 12%
below A1 to 12% above A1 (that is from 88 to 112). The equation for this is:

=RANDBETWEEN(A1*0.88,A1*1.12)

Row 2 is the next year and in A2 we put:
=B1*1.04
Which is the 4% growth over the previous year's randon sample. A2 is the
new center point, so in B2:

=RANDBETWEEN(A2*0.88,A2*1.12)


We now propagate row 2 down the columns:
Select A2 and B2 and copu them down as far as you like.
--
Gary's Student


"rvExcelNewTip" wrote:


This is probabably a mathematical rather than an excel question, but I
give it a try. I want to generate a "random" data series with the
following characteristics:
1. The overal series should have a X% compounded growth rate
2. Each point should be within a Y% interval around the previous
point.
(Y X)

For instance, the data series should show a 4% compounded growth rate,
but from one point to the next there can be a variation of +/- 12%.

Has somebody a hint as to how to construct such a function?


--
rvExcelNewTip
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