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

Method 1 – Predicting Exponential Growth Using 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.

Press Enter.

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)

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.

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.

Method 2 – Estimating Future Value 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: $y = 10, 000* (1 + 0.06)^{4}$