Calculating average growth rate is now easier

Calculating the average growth rate of return on investment (ROI) during specific time frame has become now easier than ever with Microsoft Excel, the procedure involves a few simple steps.

Steps to calculate average growth rate

1. Format Data

1. Label your columns: In column A, label the first cell as "Year," column B as "Amount," and column C as "Growth Rate."
2. Add the years: List each year of your investment in column A, starting from the second row.
3. Add investment values: Enter the corresponding investment amounts in column B for each year.
4. Set number formatting: Format column A as a date, column B as currency, and column C as percentages.

2. Calculate Yearly Growth Rate

1. Double-click cell C3: This is where you'll calculate the growth rate for the first year.
2. Enter the formula: Type or input the formula =(B3-B2)/B2 into cell C3 to calculate the annualised yield rate.
3. Press Enter or Return: This displays the growth rate for the first year.
4. Apply the formula: Drag the formula down to apply it to the remaining cells in column C.

3. Calculate Average Growth Rate

1. Double-click a blank cell: Select a cell in a different column to display the average growth rate.
2. Use the AVERAGE function: Enter the formula =AVERAGE(C3:C20) (replace C20 with the actual last cell containing a growth percentage) to calculate the average growth rate.
3. Press Enter or Return: The average growth rate of your investment will appear in the cell.