How to Use the Exponential Growth Formula in Excel (2 Methods) -

Method 1 – Using the Excel GROWTH Formula

Description

The GROWTH function in Excel predicts future exponential growth based on existing data.
Given a set of x and y values, it calculates the relationship between them and uses it to predict y values for new x values.
The formula for GROWTH is:
$y = b \cdot m^{x}$
- Here, $y$ is the intercept from the y-axis, and $m$ is the slope of the curve.

Syntax

=GROWTH(known_ys, [known_xs],[new_xs],const )

Here:
known_ys – A set of known y values that is a required argument.
known_xs– A set of known x values of the same dimension as of the set of y values and it is an optional argument.
new_xs- A set of new x values for which the function should calculate the predicted y values. It is also optional. If not given the function assumes it as the same length as the set of known x values.
const– If TRUE or omitted, b is calculated normally.
If FALSE, b is set to 1 and the equation is adjusted to y= m^x

Example 1 – Input-only known_ys

Steps

Suppose we have y values in cells B3:B8.
In cell D3, enter =GROWTH(and select cells B3:B8 as known_ys argument).

Exponential Growth Formula in Excel

Press Enter.

Exponential Growth Formula in Excel

We have the growth in cells D3:D8.

Notes

You can round these values using the following formula in cell D3:

=ROUND(GROWTH(C3:C8),0)

Exponential Growth Formula in Excel

Example 2 – Input known_ys and known_xs

Use both known_ys and known_xs arguments in the GROWTH function.
The growth will be the same as in Example 1.

Example 3 – Input known_ys, known_xs, and new_xs

Add a new_xs column for prediction.
In cell E3, insert the formula:

=GROWTH(C3:C8,B3:B8,D3:D8)

where D3:D8 represents new_xs values.

As we described earlier, the GROWTH function predicts values based on the relationship (equation) is found from the existing data, which is illustrated in the following screenshot.

Exponential Growth Formula in Excel

Example 4 – Input known_ys, known_xs, new_xs, and const

Omitting the const argument defaults to TRUE.
The following screenshot shows growth values for different const arguments.

Exponential Growth Formula in Excel

Method 2 – Using Exponential Growth Formula in Excel

Description

If we have a quantity (such as population, profit, or investment) that grows at a constant rate over time intervals, we can use the exponential growth formula to predict future values.
The formula for exponential growth is:
(y) = a*(1+r)^x
- Here:
  - $a$ represents the initial value of the quantity (e.g., initial investment).
  - $r$ is the constant annual growth rate.
  - $x$ denotes the number of time intervals.

Example

- Suppose we have an initial investment of $10,000.
- We want to find the value after 4 years at a constant growth rate of 6%.
- Applying the formula: $y = 10, 000* (1 + 0.06)^{4}$