POWER with a fraction: the yearly growth rate
A root is a power of 1/n — which is how you get an average annual rate.
Task:
Revenue grew from the first figure to the second over the number of years shown. In E2:E4 give each product's compound annual growth rate: (end ÷ start) to the power of 1 ÷ years, minus 1.
Interactive Spreadsheet
Hints
+5 XPno-hints bonusSolve it on your own to keep the bonus. Each hint gets one step closer to the formula.
Variations of POWER
0/3The same formula in the other shapes it takes at work.
- POWER Function / Exponentiation
Calculate powers and square roots using mathematical functions.
CoreIntermediate - Compound growth with ^
Growth that builds on itself is a power, not a multiplication.
Intermediate - POWER with a fraction: the yearly growth rate
A root is a power of 1/n — which is how you get an average annual rate.
Advanced
The data in this exercise
This is the grid you start with. Cell references in the task — B6, C2 — point at the row numbers and column letters below.
| A | B | C | D | E | |
|---|---|---|---|---|---|
| 1 | Product | Start | End | Years | Annual rate |
| 2 | Widgets | 200000 | 292820 | 4 | |
| 3 | Gadgets | 80000 | 125971.2 | 5 | |
| 4 | Gizmos | 50000 | 60500 | 2 |
What this exercise teachesMay contain the answer
Dividing the total growth by the number of years overstates the rate, because each year compounds on the last. Taking the root undoes the compounding: Widgets grew 46% in total, but only 10% a year.