RRI in Excel: Equivalent Growth Rates and Annualization

=RRI(nper, pv, fv)

Nper is the number of periods, pv the initial amount, and fv the final amount. All three are required. The worked domain here uses positive nper and positive amounts. The independent equation is (fv/pv)^(1/nper)−1.

The function does not know whether periods are months, quarters or years. Its result has the period unit used in nper. Nor does it model intermediate deposits, withdrawals or irregular cash flows. It is a growth-equivalence calculation between two endpoints.

Enter 3 in B2, 1000 in B3 and 1331 in B4:

=RRI(B2,B3,B4)
=B3*(1+RRI(B2,B3,B4))^B2

Expected results are 0.1 and 1331. Display 0.1 as 10% and label it annual only if B2 really measures years.

The total growth over the full interval is 33.1%. Dividing that by three gives about 11.0333%, which is an arithmetic average of the total change, not the constant compounded rate.

For 1000 growing to 1210 in 24 months:

=RRI(24,1000,1210)
=RRI(2,1000,1210)

Expected results are about 0.797414043% per month and 10% per year. The first uses 24 monthly periods; the second uses two yearly periods.

To convert the monthly rate to an effective annual rate, calculate (1+monthly_rate)^12-1. Multiplying by twelve instead produces a nominal annual quote, which is a different rate convention.

Microsoft’s example passes 96 periods, present value 10000 and future value 11000. The independently expected formula result is approximately 0.000993307, or 0.099330738% per period. If the periods are months, the equivalent annual growth over eight years is about 1.198502414%.

The help’s prose mentions eight years and roughly 1.2%, while the displayed formula result is per one of the 96 periods. Keep these two scales separate rather than labeling the raw result 1.2% annually.

For a positive starting amount of 1000 and ending amount 729 after three periods, the independent root calculation gives -10% per period:

=RRI(3,1000,729)

The starting and ending amounts remain positive; the equivalent rate is negative because the final value is lower. The example is a mathematical expectation under the stated positive-value model, not a native test of every signed-input combination.

A flat endpoint, 1000 to 1000, has mathematical rate zero for positive nper. Do not infer broad support for zero or negative pv from these examples.

Suppose an account rises from 1000 to 1331, but an additional 200 was deposited along the way. RRI still sees only the two endpoint amounts and the period count. Its 10% three-period result would attribute all endpoint growth to compounding under the single-amount model.

That is not a valid measurement of investment performance with contributions. Preserve the full cash-flow timing and use an appropriate cash-flow analysis instead of adjusting the endpoint formula ad hoc.

The dedicated reference states #NUM! for invalid numeric arguments and #VALUE! for invalid data types, without providing a complete signed-domain table. This guide therefore constrains the worked cases rather than inventing exact outcomes for zero periods, zero present values or negative balances.

If the returned rate seems too small by about a factor of twelve, inspect whether nper counts months but the label says years. If the ending-value check fails, verify the period count and whether rounded rates were reused. Native convergence, extreme precision, blanks and coercion remain unverified. This formula describes equivalent growth, not an investment recommendation or a promise of future performance.

• Current documentation: the dedicated Microsoft reference lists Excel for Microsoft 365, Excel for Microsoft 365 for Mac, Excel 2024, Excel 2024 for Mac, Excel 2021, Excel 2021 for Mac, Excel 2019, Excel 2016.
• Introduced: Microsoft’s alphabetical catalog marks RRI as introduced in Excel 2013. Exact first build and platform-specific introduction dates remain unverified.
• Last functioning version: unknown; a current help listing is not a last-working-build test.
• Evidence checked: October 15, 2026. Official documentation was freshly retrieved; examples were independently calculated. No native Excel, Mac or web-client execution was performed.

• Microsoft RRI reference.
• Microsoft function catalog and introduction-marker explanation.
• Editorial testing standards.

Examples use English function names and comma separators. Expected numbers are rounded independent mathematical calculations; documented error expectations are labeled as such. They are not captured Excel output. All illustrative data and policies are fictional.