How to Calculate CAGR in Excel
Last updated: 2026-09-06
⚡ Quick Answer
Compound Annual Growth Rate (CAGR) measures the smoothed annualized return of an investment or business revenue over multiple periods.
=((End_Value / Start_Value) ^ (1 / Number_of_Years)) - 1📊 Visual Demo
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fx =((End_Value / Start_Value) ^ (1 / Number_of_Years)) - 1
| A | B | C | D | E | |
|---|---|---|---|---|---|
| 1 | 1 | $100,000 | $250,000 | 5 | =((C2/B2)^(1/D2))-1 |
| 2 | 2 | Annualized Return | — | — | 20.11% CAGR |
| 3 | 3 | RRI Alternative | — | 5 | =RRI(5, 100000, 250000) |
🧠 Deep Dive
Compound Annual Growth Rate (CAGR) measures the smoothed annualized return of an investment or business revenue over multiple periods.
Key Insights
- Signed cash flows: outflows are negative, inflows are positive.
- Rates must match the period (annual rate / 12 for monthly).
Common Mistakes
- Passing annual rate directly to PMT.
- Forgetting minus sign on present value.
Pro Tips
- Build a small input block with named cells.
- Format currency after math.
FAQ
What does this formula do in plain English?
Compound Annual Growth Rate (CAGR) measures the smoothed annualized return of an investment or business revenue over multiple periods.
Why is my formula not working?
Passing annual rate directly to PMT.
Does this work in Google Sheets?
Yes, this syntax is fully compatible with Google Sheets.
What is the most common mistake?
Forgetting minus sign on present value.
Related Guides
How to Calculate IRR in ExcelHow to Calculate NPV in ExcelHow to Calculate Loan Payments (PMT)How to Calculate Weighted AverageExcel Error Hub
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