Dave, why would you not use '3' for the number of years instead of '4'. As in
the example Year 1 is the starting date and should be named Year 0. For the
second example from 1000 to 1080 I get a CAGR of 2,6%. And if you double
check by adding 2.6% each year you end up with 1080.
Year 1 1000
Year 2 1026
Year 3 1053
Year 4 1080

Year Income
================
1 1000
2 1040
3 1020
4 1080

TK

"Dave F" wrote:

Compound annual growth rate (CAGR) = [(Ending value / beginning value)
^ (1 / # of years) ] - 1

Assuming your data are in cells A1:A4, then, =(A4/A1)^(1/4) - 1 is
your CAGR.

I get a CAGR of around 4% with your numbers.

Dave


On Dec 17, 12:23 pm, RJB wrote:
Excel's formulas don't work for this, as there's no negative outflow at any
point, and all of my college textbooks are in the basement.

First iteration of my question:

Year Income
================
1 1000
2 1050
3 1102.50
4 1157.63

Now, we can see that income grew by five percent each year. We can see that
income is nearly 16% higher in year 4 than year 1. But how do I calculate the
compounded growth over four years? XIRR requires a negative to work...

Let's make it stickier:

Year Income
================
1 1000
2 1040
3 1020
4 1080

Now, income grew by eight percent over four years. Year-on-year was 4%,
-1.9%, and 5.9%, respectively. What was the OVERALL compounded growth? How do
I build a formula for THAT?

Thanks