CAGR in Excel: The Formula
Calculating CAGR in Excel is simple, thanks to its robust formula features. Instead of relying on a dedicated CAGR function, you can easily compute it using a generic formula derived from the provided equation. Here’s how you can achieve this:
What is the formula of CAGR in Excel
CAGR = (FV/PV)1/n – 1
where, FV= Future Value of the investment
PV = Present Value of the investment
n = Numbers of years
In this equation, you substitute FV with the cell holding the ultimate value of the investment, PV with the cell holding the initial value, and n with the duration in years.
How To Calculate CAGR in Excel
In this article, you’ll learn what CAGR is and why it’s important. It also shows you how to calculate CAGR using Excel. Whether you’re in finance, business, or investing, knowing how to do this can help you make better choices about your money.
We’ll start with a brief explanation of what CAGR is, Its formula, and why it’s a valuable metric for evaluating investment performance. Then, we’ll explore step-by-step procedures to calculate CAGR using Excel functions and formulas. We will also discuss practical applications of CAGR calculations and tips for interpreting the results effectively.