Google Sheets RRI Function | Calculate CAGR (Compound Annual Growth Rate) | Google Sheets Functions
Use the Google Sheets RRI function to calculate the Compound Annual Growth Rate (CAGR) of an investment over a time frame. The RRI function returns the average rate of return of an investment. CAGR requires that the returns are reinvested and interest is compounded once a year.
Here's a scenario for which you would want to calculate the CAGR:
Say you wish to find out the CAGR that would grow an investment of Rs. 10000 to Rs. 15,000 in five years. The Google Sheets RRI function assists you to calculate the CAGR for this financial goal.
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Let's look at the format of the RRI function formula:
=RRI(number_of_periods, present_value, future_value)
Start the formula with an equal-to symbol.
RRI is the name of the function.
number_of_periods is the investment time frame.
present_value is the investment amount.
future_value is the value of the investment at the end of the investment time frame.
Here is an example of the RRI function:
=RRI(5, 10000, 15000)
The RRI function returns 0.0084, which is 8.45%.
Take a look at this video tutorial, which gives the steps to use the Google Sheets RRI function with an example.