### CAGR with the RRI function

In Excel 2013 and later, you can use the RRI function to calculate CAGR with a simple formula. The formula in H9 is: where C11 is the ending value in year 5, C6 is the starting value (initial investment), and B11 is the total number of periods. Note: unlike most other financial functions in Excel, fv (future value, the third argument) does not need to be entered as a negative number in RRI.

### CAGR with a manual formula

The formula for calculating CAGR manually is: In the example shown, the formula in H7 is: where C11 is the ending value in year 5, C6 is the starting value or initial investment, and B11 is the total number of periods. The first part of the formula is a measure of total return, the second part of the formula annualizes the return over the life of the investment.

### CAGR with the GEOMEAN function

The GEOMEAN function calculates geometric mean, and can also be used to calculate CAGR. To calculate CAGR with GEOMEAN, we need to use relative changes (percentage change + 1), sometimes called a growth factor. We have these values already in column E so we can use them directly in GEOMEAN the function. The formula in H8 is:

### Dave Bruns

Hi - I’m Dave Bruns, and I run Exceljet with my wife, Lisa. Our goal is to help you work faster in Excel. We create short videos, and clear examples of formulas, functions, pivot tables, conditional formatting, and charts.