Calculate the CAGR
 

How can you calculate the CAGR (Compounded Annual Growth Rate)?

Say I have 2 numbers and corresponding dates as follows;

1999 - $10000

2003 - $25000

How can I determine the compounded growth from just this information?

Bruce

=(25000/10000)^(1/(2003-1999))-1
=25.74%

Mangesh


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It's the final number divided by the earlier number raised to the power of 1
over the number of annual periods. Subtract 1 from that result to get the
CAGR. In your case, assuming that both the amounts are beginning of period,
the formula would be

=25000/19000^(1/4) - 1

"Bruce" wrote in message
...
How can you calculate the CAGR (Compounded Annual Growth Rate)?

Say I have 2 numbers and corresponding dates as follows;

1999 - $10000

2003 - $25000

How can I determine the compounded growth from just this information?

Bruce

Thanks both of you. They both work. Is there an excel function to calc
compound rates? I remember coming across this some time ago but cannot seem
to find it in the help now...

"Duke Carey" wrote:

It's the final number divided by the earlier number raised to the power of 1
over the number of annual periods. Subtract 1 from that result to get the
CAGR. In your case, assuming that both the amounts are beginning of period,
the formula would be

=25000/19000^(1/4) - 1

"Bruce" wrote in message
...
How can you calculate the CAGR (Compounded Annual Growth Rate)?

Say I have 2 numbers and corresponding dates as follows;

1999 - $10000

2003 - $25000

How can I determine the compounded growth from just this information?

Bruce

not that I know of. But RATE gives the rate for periodic payments.

Mangesh



"Bruce" wrote in message
...
Thanks both of you. They both work. Is there an excel function to calc
compound rates? I remember coming across this some time ago but cannot
seem
to find it in the help now...

"Duke Carey" wrote:

It's the final number divided by the earlier number raised to the power
of 1
over the number of annual periods. Subtract 1 from that result to get
the
CAGR. In your case, assuming that both the amounts are beginning of
period,
the formula would be

=25000/19000^(1/4) - 1

"Bruce" wrote in message
...
How can you calculate the CAGR (Compounded Annual Growth Rate)?

Say I have 2 numbers and corresponding dates as follows;

1999 - $10000

2003 - $25000

How can I determine the compounded growth from just this information?

Bruce

Yes using RATE function you can get the CAGR as followis: -
=rate(4,0,-10000,25000)
=25.74%


"Mangesh Yadav" wrote in message
...
not that I know of. But RATE gives the rate for periodic payments.

Mangesh



"Bruce" wrote in message
...
Thanks both of you. They both work. Is there an excel function to calc
compound rates? I remember coming across this some time ago but cannot
seem
to find it in the help now...

"Duke Carey" wrote:

It's the final number divided by the earlier number raised to the power
of 1
over the number of annual periods. Subtract 1 from that result to get
the
CAGR. In your case, assuming that both the amounts are beginning of
period,
the formula would be

=25000/19000^(1/4) - 1

"Bruce" wrote in message
...
How can you calculate the CAGR (Compounded Annual Growth Rate)?

Say I have 2 numbers and corresponding dates as follows;

1999 - $10000

2003 - $25000

How can I determine the compounded growth from just this information?

Bruce

=RATE(4,0,-10000,25000)

--

Kind Regards,

Niek Otten

Microsoft MVP - Excel

"Mangesh Yadav" wrote in message
...
not that I know of. But RATE gives the rate for periodic payments.

Mangesh



"Bruce" wrote in message
...
Thanks both of you. They both work. Is there an excel function to calc
compound rates? I remember coming across this some time ago but cannot
seem
to find it in the help now...

"Duke Carey" wrote:

It's the final number divided by the earlier number raised to the power
of 1
over the number of annual periods. Subtract 1 from that result to get
the
CAGR. In your case, assuming that both the amounts are beginning of
period,
the formula would be

=25000/19000^(1/4) - 1

"Bruce" wrote in message
...
How can you calculate the CAGR (Compounded Annual Growth Rate)?

Say I have 2 numbers and corresponding dates as follows;

1999 - $10000

2003 - $25000

How can I determine the compounded growth from just this information?

Bruce