In Excel: put your start and end values and the number of years into =(End/Start)^(1/Years)-1, then format the cell as a percentage.
€10,000.00 → €19,672.00 over 10 years
Need it as an auditable file?
This calculation ships inside the Corporate Finance Suite — formula-driven, unlocked, audit-ready.
Need it as an auditable file?
Ships inside the linked template — formula-driven, unlocked, audit-ready.
What this does
CAGR smooths a multi-year change into one annual rate — the constant rate that would carry the starting value to the ending value over the period. It strips out the noise of bumpy year-to-year swings so two investments over different horizons can be compared on equal footing. Because it is a geometric mean of growth, it is the honest way to summarise compounding, where a simple average would overstate the return. The same idea underpins a lot of everyday Excel work, so the few minutes spent getting it right here pay back across every sheet you build afterwards. Treat it as a pattern, not a one-off, and it stops being something you look up and starts being something you reach for. The difference between a quick fix and a sheet you can trust is the extra minute you spend validating “cagr formula excel”. Start on a copy or a tiny sample, keep the affected formula visible, and compare the result with the tool above before you touch the real workbook. When a formula is involved, keep the inputs labelled beside it, reference cells instead of typing values, and apply number formatting only after the result checks out. The point is a calculation you can defend to a CFO or an auditor, but the practical win is that someone else can open the file and understand what happened without asking you.
A worked example
Say a fund grew from €10,000 to €19,672 over 10 years. Enter =(19672/10000)^(1/10)-1 and format as a percentage: the result is 7.0%. That single figure means the fund effectively earned 7% every year, compounded — even though the real path was lumpier. Change the ending value to €25,000 and the rate jumps to 9.6%, which is exactly what the live chart above redraws as you type. Reach for CAGR whenever you need to compare growth over different time spans or report a single, defensible annual figure to a board or client. It is the standard language of investment and revenue reporting precisely because it is comparable and hard to game. If there is any chance you will reuse this, drop it into a small template tab right now: a labelled input area on the left and the formula beside it, checked once against the tool above. Next time the same question comes up, the answer is a single paste away instead of a rebuild from memory.
In Google Sheets
Everything above works in Google Sheets too. Excel and Sheets share the formula syntax used here; only the surrounding menus are arranged differently. That portability is deliberate — learn it once and it follows you between the two tools and across Windows and Mac. Nothing on this page is behind a login: the tool runs entirely in your browser, the formula is shown in full with one-click copy, and the steps work the same on Windows and Mac. That is the whole promise here — the exact answer, a way to prove it on your own numbers, and just enough context to make it stick. The short version of “cagr formula excel”: the answer is at the top of this page, the tool proves it on your own numbers, and the sections above explain why it holds so the next variation does not stump you. Excel rewards people who reference cells instead of typing values and who keep inputs separate from formulas, because that is what makes a result you can audit months later. Build it once, deliberately, with the live tool as a check, and you convert a one-off lookup into a reusable skill — which is the whole point of learning the why and not just the what.
Common mistakes
- Using a simple average of yearly returns — it overstates compounded growth; CAGR is the geometric rate.
- Counting the wrong number of years (use elapsed years, not the count of data points).
- Feeding a zero or negative starting value, which makes the ratio meaningless.
- Leaving the cell as a raw decimal (0.07) instead of formatting it as 7%.
Frequently asked questions
What is a good CAGR?
It depends on the asset class: broad equity indices have historically returned roughly 7–10% nominal CAGR, but the right benchmark is whatever a comparable, equally risky alternative would return.
Does CAGR account for volatility?
No. It describes the smoothed end-to-end rate and deliberately ignores the path, so two very different risk profiles can share the same CAGR. Pair it with standard deviation to see the risk.
Can CAGR be negative?
Yes — if the ending value is below the starting value the rate is negative, telling you the position lost an average of that much each year.
Other ways people ask this
On the way here you may have searched this as “formula for cagr excel”, “cagr formula for excel” and “excel formula cagr” — it is all the same task, and this page is the single, complete answer to it.
This guide also answers
- cagr excel function
Why do people search for this in so many different ways?
Because the same task has many names. “formula for cagr excel”, “cagr formula for excel”, “excel formula cagr” all point at the one operation explained on this page, which is why they all lead here.