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How to calculate CAGR in Excel and Google Sheets
Topic:Finance basicsExcel & Google Sheets
=(B2/A2)^(1/C2)-1✓
Verified example
Computed by a real spreadsheet engine on the sample data below.
| Start Value | End Value | Years | CAGR |
| 1000 | 1500 | 5 | |
| 5000 | 8000 | 3 | |
| 10000 | 25000 | 10 | |
| 2000 | 2200 | 2 |
=(B2/A2)^(1/C2)-1→0.0844717712
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Step by step
- 1Set up three columns: Start Value (A), End Value (B), and Number of Years (C).
- 2In the CAGR column, enter =(B2/A2)^(1/C2)-1. This raises the value ratio to the power of 1 divided by the number of years, then subtracts 1.
- 3Format the result as Percentage. The result is the annualized growth rate over the period.
Tips
- CAGR ignores volatility — an investment that swings wildly but ends at the same value will show the same CAGR as a steady grower. Always review the full history alongside CAGR.
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Frequently asked
Can I use the RATE function to calculate CAGR?
Yes: =RATE(C2,0,-A2,B2) where C2 is years, A2 is the starting value (negated as PV), and B2 is the ending value (FV). The result is the same.
What if my data spans months instead of whole years?
Divide the number of months by 12 in the exponent: =(B2/A2)^(12/months)-1 to convert to an annualized rate.
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