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Calculate the CAGR

  1. #1
    Bruce
    Guest

    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

  2. #2
    Forum Contributor
    Join Date
    06-10-2004
    Location
    India
    Posts
    1,066
    =(25000/10000)^(1/(2003-1999))-1
    =25.74%

    Mangesh

  3. #3
    Duke Carey
    Guest

    Re: Calculate the CAGR

    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" <[email protected]> wrote in message
    news:[email protected]...
    > 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




  4. #4
    Bruce
    Guest

    Re: Calculate the CAGR

    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" <[email protected]> wrote in message
    > news:[email protected]...
    > > 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

    >
    >
    >


  5. #5
    Mangesh Yadav
    Guest

    Re: Calculate the CAGR

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

    Mangesh



    "Bruce" <[email protected]> wrote in message
    news:[email protected]...
    > 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" <[email protected]> wrote in message
    > > news:[email protected]...
    > > > 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

    > >
    > >
    > >




  6. #6
    N Harkawat
    Guest

    Re: Calculate the CAGR

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


    "Mangesh Yadav" <[email protected]> wrote in message
    news:%[email protected]...
    > not that I know of. But RATE gives the rate for periodic payments.
    >
    > Mangesh
    >
    >
    >
    > "Bruce" <[email protected]> wrote in message
    > news:[email protected]...
    >> 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" <[email protected]> wrote in message
    >> > news:[email protected]...
    >> > > 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
    >> >
    >> >
    >> >

    >
    >




  7. #7
    Niek Otten
    Guest

    Re: Calculate the CAGR

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

    --

    Kind Regards,

    Niek Otten

    Microsoft MVP - Excel

    "Mangesh Yadav" <[email protected]> wrote in message
    news:%[email protected]...
    > not that I know of. But RATE gives the rate for periodic payments.
    >
    > Mangesh
    >
    >
    >
    > "Bruce" <[email protected]> wrote in message
    > news:[email protected]...
    >> 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" <[email protected]> wrote in message
    >> > news:[email protected]...
    >> > > 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
    >> >
    >> >
    >> >

    >
    >




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