Hi, both correct for integer years. Bit tricky with odd months. When using
periodic compounding, equation is: FV=PV*(1+i)^n*(1+i/f)
FV - future value, PV - present value, i - interest rate (annual in this
case), n - number of full years, f - fraction of year, in case of 1 odd month
this is 12, e.g. 1/12 of year. Extracting i needs itteration, that's why I
would use either goal seek or solver.
Using continuous compounding, equation is: FV=PV*e^(i*t)
e - Euler's constant, base of the natural log (approx. 2.718281), i - annual
interest rate, t - number of years (in this case 5 1/12, e.g. 61/12), when
logarithming, we can easy get i as: i=(ln(FV)-ln(PV))/t
N.B. i for periodic compounding is bigger than i when continuous compounding
(due to continous compounding). Btw, I guess IRR works pretty well. For 5
year, when i for continuous compounding is 10%, IRR function in Excel shows
9.9885%, less than 1.15 b.p. (baisis point - 1/100 p.c.) difference, in my
opinion really not too much. Just do not forget u have to input the initial
flow as negative when using IRR function.

HTH
Alojz

"dbsocal" wrote:

The equation I use is:
=((y/x)^(1/n))-1
where
y= value in final year
x=value in 1st year
n=# of years
--
Thanks


"David Biddulph" wrote:

If you're saying 5 years, it's
=(10000/5000)^(1/5)-1 formatted as percentage.
--
David Biddulph

"Johan" wrote in message
...
Hi,

I have office 2003. I need an excel formula to calculate Average
percentage
increase.
Example start wage 5000 current wage 10000
Start date 01/02/2004 (1st Feb) current date 03/03/2009 (3rd March)
length of service 5 years
What was the average annual % increase received to go from 5000 to 10000
in
5 years. This needs to take compound growth into account
(the xirr formula does not work)

Please help

Johan Campbell