How to Calculate Average Growth Rate in Excel

Thứ sáu - 26/04/2024 23:11

This wikiHow teaches you how to find the average growth rate of an investment in Microsoft Excel. Average growth rate is a financial term used to describe a method of projecting the rate of return on a given investment over a period of...

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This wikiHow teaches you how to find the average growth rate of an investment in Microsoft Excel. Average growth rate is a financial term used to describe a method of projecting the rate of return on a given investment over a period of time. By factoring the value of a particular investment in relationship to the periods per year, you can calculate an annualized yield rate, which can be useful in the development of an investment strategy.

Part 1

Part 1 of 3:

Formatting Data

1
Label your columns. The first thing we'll need to is create column labels for our data.
- Type "Year" into A1 (the first cell in column A).
- Type "Amount" into B1.
- Type "Growth Rate" into C1.

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Column A should contain a list of every year you've had the investment. In the first available cell of Column A (A2, just below the column label), type "Initial Value" or something similar. Then, in each subsequent cell, list each year.

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The first available cell of Column B (B2, just below the label) should contain the amount of the initial investment. Then, in B3, insert the investment's value after one full year, and repeat this for all other years.

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To ensure your numbers display properly, you'll need to add numerical formatting to your cells:

Click column A (the letter above the column) to select it, and then click the Format button on the Home tab. It'll be near the top-right corner of Excel. Then, click Format Cells on the menu, select Date in the left panel, and then choose a date format in the right panel. Click OK to save your changes.

For column B, you'll want to format the amounts as currency. Click the "B" above column B to select it, click the Format button on the Home tab, and then click Format Cells on the menu. Click Currency in the left panel, select a currency symbol and format on the right, and then click OK.

Column C should be formatted as percentages. Click the "C" above column C, and again, click Format, and then Format Cells. Select Percentage in the left panel, choose the number of decimal places in the right panel, and then click OK.