Compound annual growth rate

For annual values, CAGR is defined as: :\mathrm{CAGR}(t_0,t_n) = \left( \frac{V(t_n)}{V(t_0)} \right)^\frac{1}{t_n-t_0} - 1 where V(t_0) is the initial value, V(t_n) is the end value, and t_n - t_0 is the number of years. CAGR can also be used to calculate mean annualized growth rates on quarterly or monthly values. The numerator of the exponent would be the value of 4 in the case of quarterly, and 12 in the case of monthly, with the denominator being the number of corresponding periods involved. In practice, CAGR calculations are often performed in Microsoft Excel. A convenient built-in function is =RRI(nper, pv, fv), where nper represents the number of periods, pv denotes the present value (initial investment), and fv represents the future value (final value of the investment). The RRI function (Return Rate on Investment) returns the equivalent constant interest rate per period, effectively matching the CAGR when applied over a specified period.{{cite web |title=How to Calculate CAGR in Excel == Applications ==

These are some of the common CAGR applications: • Calculating and communicating the mean returns of investment funds • Demonstrating and comparing the performance of investment advisors == See also ==