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The correct way to do CAGR calculations?
The Next CEO of Stack OverflowAre these derivatives correct??Is my working correct? Exponenial decayMore than one way to solve a exponential equation?Is this proof that $e$ is irrational correct?Other Way to Express an Exponential FunctionIs this a correct way of expressing number in natural logarithmA mathmatical way to solve for $x$ in $(a + b)^2 = a^x + b^x$On the way finding limit.What is the significance of the number 2.87682 popping up in my calculations?Simple way of explaining the empty product
$begingroup$
I was recently familiarizing myself with CAGR formulae and spotted that several sources interpret the formula in different ways.
METHOD ONE: from Wikipedia
$V_0$=9000 (2004),
$V_n$=13000 (2007)
$ mathrm CAGR (t_0,t_n)=left(frac V(t_n)V(t_0)right)^frac 1t_n-t_0-1$
Which gives us the CAGR value to be 13%.
$rm CAGR(0,3) = left( frac130009000 right)^frac13 - 1 = 0.13 = 13%$
METHOD TWO: Extend Office
However, other sources appear to count the number of years differently, namely using the (N-1) notation, such as here:(https://www.extendoffice.com/documents/excel/2596-excel-average-compound-growth-rate.html):
Where instead of $t_n -t_0$ the author is counting all the periods and subtracting one. In this particular example, the date range of 2011-2020 is counted as 9 years (the distance between $t_n$ and $t_0$).
For now, both methods of calculating years line up, which doesn't affect the answers.
METHOD THREE: CAGRCALCULATOR
What get's confusing is when some sources appear to count the total number of years including the original year, such as here (https://cagrcalculator.net/formula-for-cagr-calculation/), where between 2008 and 2016 is counted as 9 years, where the prior formulae would return 8.
Putting aside the gotchas of calculating CAGR and treating it as the definitive growth metric, which one of these is correct?
exponential-function
asked Mar 19 at 20:49
Thomas EThomas E
11
$endgroup$
add a comment |
$begingroup$
I was recently familiarizing myself with CAGR formulae and spotted that several sources interpret the formula in different ways.
METHOD ONE: from Wikipedia
$V_0$=9000 (2004),
$V_n$=13000 (2007)
$ mathrm CAGR (t_0,t_n)=left(frac V(t_n)V(t_0)right)^frac 1t_n-t_0-1$
Which gives us the CAGR value to be 13%.
$rm CAGR(0,3) = left( frac130009000 right)^frac13 - 1 = 0.13 = 13%$
METHOD TWO: Extend Office
However, other sources appear to count the number of years differently, namely using the (N-1) notation, such as here:(https://www.extendoffice.com/documents/excel/2596-excel-average-compound-growth-rate.html):
Where instead of $t_n -t_0$ the author is counting all the periods and subtracting one. In this particular example, the date range of 2011-2020 is counted as 9 years (the distance between $t_n$ and $t_0$).
For now, both methods of calculating years line up, which doesn't affect the answers.
METHOD THREE: CAGRCALCULATOR
What get's confusing is when some sources appear to count the total number of years including the original year, such as here (https://cagrcalculator.net/formula-for-cagr-calculation/), where between 2008 and 2016 is counted as 9 years, where the prior formulae would return 8.
Putting aside the gotchas of calculating CAGR and treating it as the definitive growth metric, which one of these is correct?
exponential-function
asked Mar 19 at 20:49
Thomas EThomas E
11
$endgroup$
1
$begingroup$
What is CAGR for the dumbs ?
$endgroup$
– Jean Marie
Mar 19 at 21:54
$begingroup$
If you mean as an expansion of abbreviation - compound annual growth rate
$endgroup$
– Thomas E
Mar 19 at 21:57
$begingroup$
Thanks for your prompt answer to a non native english speaker.
$endgroup$
– Jean Marie
Mar 19 at 22:00
add a comment |
$begingroup$
I was recently familiarizing myself with CAGR formulae and spotted that several sources interpret the formula in different ways.
METHOD ONE: from Wikipedia
$V_0$=9000 (2004),
$V_n$=13000 (2007)
$ mathrm CAGR (t_0,t_n)=left(frac V(t_n)V(t_0)right)^frac 1t_n-t_0-1$
Which gives us the CAGR value to be 13%.
$rm CAGR(0,3) = left( frac130009000 right)^frac13 - 1 = 0.13 = 13%$
METHOD TWO: Extend Office
However, other sources appear to count the number of years differently, namely using the (N-1) notation, such as here:(https://www.extendoffice.com/documents/excel/2596-excel-average-compound-growth-rate.html):
Where instead of $t_n -t_0$ the author is counting all the periods and subtracting one. In this particular example, the date range of 2011-2020 is counted as 9 years (the distance between $t_n$ and $t_0$).
For now, both methods of calculating years line up, which doesn't affect the answers.
METHOD THREE: CAGRCALCULATOR
What get's confusing is when some sources appear to count the total number of years including the original year, such as here (https://cagrcalculator.net/formula-for-cagr-calculation/), where between 2008 and 2016 is counted as 9 years, where the prior formulae would return 8.
Putting aside the gotchas of calculating CAGR and treating it as the definitive growth metric, which one of these is correct?
exponential-function
asked Mar 19 at 20:49
Thomas EThomas E
11
$endgroup$
I was recently familiarizing myself with CAGR formulae and spotted that several sources interpret the formula in different ways.
METHOD ONE: from Wikipedia
$V_0$=9000 (2004),
$V_n$=13000 (2007)
$ mathrm CAGR (t_0,t_n)=left(frac V(t_n)V(t_0)right)^frac 1t_n-t_0-1$
Which gives us the CAGR value to be 13%.
$rm CAGR(0,3) = left( frac130009000 right)^frac13 - 1 = 0.13 = 13%$
METHOD TWO: Extend Office
However, other sources appear to count the number of years differently, namely using the (N-1) notation, such as here:(https://www.extendoffice.com/documents/excel/2596-excel-average-compound-growth-rate.html):
Where instead of $t_n -t_0$ the author is counting all the periods and subtracting one. In this particular example, the date range of 2011-2020 is counted as 9 years (the distance between $t_n$ and $t_0$).
For now, both methods of calculating years line up, which doesn't affect the answers.
METHOD THREE: CAGRCALCULATOR
What get's confusing is when some sources appear to count the total number of years including the original year, such as here (https://cagrcalculator.net/formula-for-cagr-calculation/), where between 2008 and 2016 is counted as 9 years, where the prior formulae would return 8.
Putting aside the gotchas of calculating CAGR and treating it as the definitive growth metric, which one of these is correct?
exponential-function
exponential-function
asked Mar 19 at 20:49
Thomas EThomas E
11
asked Mar 19 at 20:49
Thomas EThomas E
11
asked Mar 19 at 20:49
Thomas EThomas E
11
asked Mar 19 at 20:49
Thomas EThomas E
11
asked Mar 19 at 20:49
Thomas EThomas E
11
11
1
$begingroup$
What is CAGR for the dumbs ?
$endgroup$
– Jean Marie
Mar 19 at 21:54
$begingroup$
If you mean as an expansion of abbreviation - compound annual growth rate
$endgroup$
– Thomas E
Mar 19 at 21:57
$begingroup$
Thanks for your prompt answer to a non native english speaker.
$endgroup$
– Jean Marie
Mar 19 at 22:00
add a comment |
1
$begingroup$
What is CAGR for the dumbs ?
$endgroup$
– Jean Marie
Mar 19 at 21:54
$begingroup$
If you mean as an expansion of abbreviation - compound annual growth rate
$endgroup$
– Thomas E
Mar 19 at 21:57
$begingroup$
Thanks for your prompt answer to a non native english speaker.
$endgroup$
– Jean Marie
Mar 19 at 22:00
1
1
$begingroup$
What is CAGR for the dumbs ?
$endgroup$
– Jean Marie
Mar 19 at 21:54
$begingroup$
What is CAGR for the dumbs ?
$endgroup$
– Jean Marie
Mar 19 at 21:54
$begingroup$
If you mean as an expansion of abbreviation - compound annual growth rate
$endgroup$
– Thomas E
Mar 19 at 21:57
$begingroup$
If you mean as an expansion of abbreviation - compound annual growth rate
$endgroup$
– Thomas E
Mar 19 at 21:57
$begingroup$
Thanks for your prompt answer to a non native english speaker.
$endgroup$
– Jean Marie
Mar 19 at 22:00
$begingroup$
Thanks for your prompt answer to a non native english speaker.
$endgroup$
– Jean Marie
Mar 19 at 22:00
add a comment |
0
active
oldest
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$begingroup$
What is CAGR for the dumbs ?
$endgroup$
– Jean Marie
Mar 19 at 21:54
$begingroup$
If you mean as an expansion of abbreviation - compound annual growth rate
$endgroup$
– Thomas E
Mar 19 at 21:57
$begingroup$
Thanks for your prompt answer to a non native english speaker.
$endgroup$
– Jean Marie
Mar 19 at 22:00