PDURATION & RRI Investment Growth Formulas
Learn how to calculate compound annual growth rates (CAGR) and doubling periods in Excel using RRI and PDURATION. Audit portfolio milestones cleanly.
Wealth managers and investment analysts track how fast portfolio assets grow over multi-year holding periods. For example, if an investor puts $100,000 into a fund and it grows to $250,000 over 7 years, the investor wants to know the Compound Annual Growth Rate (CAGR) and how long it will take for that asset to double in value.
Instead of typing complex exponent formulas like =(FV/PV)^(1/n) - 1 or logarithmic equations, Excel provides two streamlined formulas: RRI and PDURATION.
Quick Comparison: Growth and Duration Formulas
| Formula | What It Calculates | Mathematical Formula | Sign Rule Requirement |
|---|---|---|---|
RRI(nper, pv, fv) |
Compound Annual Growth Rate (CAGR) | Rate = (FV / PV)^(1 / nper) - 1 |
All values must be positive (> 0) |
PDURATION(rate, pv, fv) |
Number of periods needed to reach target value | Periods = (ln(FV) - ln(PV)) / ln(1 + rate) |
All values must be positive (> 0) |
The Positive Sign Advantage
Unlike TVM formulas (PV, FV, RATE) where cash outflows must be entered as negative numbers, RRI and PDURATION require strictly positive numbers. Entering a negative value triggers a #NUM! error.
Hands-on Practice Playground
Use the investment portfolio table below to calculate CAGR and project doubling horizons using RRI and PDURATION. Follow each objective to complete the exercise.
In cell E2, calculate the CAGR for Tech Equity Growth using RRI.
In cell E2, calculate the compound annual growth rate (CAGR) for Tech Equity Growth using the RRI formula with years D2, present value B2, and future value C2.
In cell F2, calculate how many years it will take to double initial investment B2 at growth rate E2 using PDURATION.
In cell F2, calculate how many years it will take to double initial investment B2 to 200000 at growth rate E2 using the PDURATION formula.
In cell E3, calculate the annualized growth rate for the Global Dividend Fund.
In cell E3, calculate the annualized growth rate for the Global Dividend Fund using RRI with years D3, initial value B3, and matured value C3.
Ready to apply PDURATION & RRI Investment Growth Formulas in a real workbook?
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