What Is the Formula in Excel for Calculating CAGR?
The formula for calculating compound annual growth rate (CAGR) in Excel is: = ((FV/PV)^(1/n)) – 1, where “FV” is the ending value, “PV” is the beginning value and “n” is the number of years. CAGR is a measurement of the return on an investment over a defined period of time.
CAGR can also be calculated in Excel using the XIRR function which uses the syntax: XIRR(values, dates, guess). The XIRR function allows for the inclusion of multiple values and dates rather than just the ending and beginning value, but must also include a guess at what the final estimate of CAGR will be.