Excel ROUND Practice Question: Revenue was in B2 (120000) six years ago (B4 = 6) and is in B3 (295000) now.…
The question
Revenue was in B2 (120000) six years ago (B4 = 6) and is in B3 (295000) now. Find the compound annual growth rate (CAGR) as a decimal, rounded to 4 decimals. Put it in D2.
The data
| A | B | C | D | |
|---|---|---|---|---|
| 1 | Item | Value | Result | |
| 2 | Starting revenue | 120000 | ? | |
| 3 | Ending revenue | 295000 | ||
| 4 | Years | 6 |
The yellow cell is where your answer goes.
Show answer
Answer in D2: 0.1617
How it works
Explanation: CAGR is the constant yearly rate that takes the starting value to the ending value. Divide end by start, raise to the power of 1 over the years, then subtract 1.
Syntax: =ROUND((B3/B2)^(1/B4)-1,4)
(295000/120000)^(1/6) - 1 = 0.1617, about 16.17% a year.
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Try this question in the live sheet →ROUND syntax
Rounds a number to a set number of decimal places. ROUND is used in financial models and engineering-style calculations where precise numeric work is needed. Full ROUND guide.
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