To better understand the CAGR logic, let's have a look at the following example.
Excel rate function for mac how to#
In this tutorial, we won't be digging deeply in arithmetic, and focus on how to write an effective CAGR formula in Excel that allows calculating compound annual growth rate based on 3 primary input values: investment's beginning value, ending value, and time period.
Strictly speaking, it's not an accounting term, but it is often used by financial analysts, investment managers and business owners to figure out how their business has developed or compare revenue growth of competing companies. In simple terms, CAGR measures the return on an investment over a certain period of time. Today, we'll take a step further and explore different ways to compute Compound Annual Growth Rate (CAGR). In one of our previous articles, we unveiled the power of compound interest and how to calculate it in Excel. The tutorial explains what the Compound Annual Growth Rate is, and how to make a clear and easy-to-understand CAGR formula in Excel.
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