Compound Rate of Return
 

I want to figure out what my compound rate of increase is for two values
between a span of six years. In 1999, our health rates for an employee were
$200.18 per month. In 2005, it is $248.92. While the % increase is 24%
overall, what function do I use to calculate the compound rate of increase?
Thanks!

Steve C

On Mon, 20 Jun 2005 11:55:04 -0700, "Steve C"
wrote:

I want to figure out what my compound rate of increase is for two values
between a span of six years. In 1999, our health rates for an employee were
$200.18 per month. In 2005, it is $248.92. While the % increase is 24%
overall, what function do I use to calculate the compound rate of increase?
Thanks!

Steve C

You can use the RATE worksheet function. You need to make either the PV or FV
value negative.

=RATE(2005-1999,,-200.18,248.92) -- 3.70%

A mathematical formula is:

=(248.92/200.18)^(1/6)-1




--ron

=(248.92/200.18)^(1/6)-1
=3.70%

Or

=POWER(248.92/200.18,1/6)-1


"Steve C" wrote in message
...
I want to figure out what my compound rate of increase is for two values
between a span of six years. In 1999, our health rates for an employee
were
$200.18 per month. In 2005, it is $248.92. While the % increase is 24%
overall, what function do I use to calculate the compound rate of
increase?
Thanks!

Steve C