Growth function in Excel

I'm working on a revenue forecast and have several revenue streams.  I'm predicting a different month for stabilization, after which I think a monthly or annual growth rate is appropriate.  Until that point in time, though, I expect an exponential growth.  For example, memberships are expected to reach 10k per month by month 6, with a 5% growth per month thereafter.  I'd like to figure out, via a formula, a quick way to grow the revenue from $0 to $10k per month by month 6, with the ability to change the stabilization month (6 in this case) and Dollar figure ($10k in this case) at the stabilization point.  Anyone have any ideas?
BBluAsked:
Who is Participating?
I wear a lot of hats...

"The solutions and answers provided on Experts Exchange have been extremely helpful to me over the last few years. I wear a lot of hats - Developer, Database Administrator, Help Desk, etc., so I know a lot of things but not a lot about one thing. Experts Exchange gives me answers from people who do know a lot about one thing, in a easy to use platform." -Todd S.

Patrick MatthewsCommented:
>>I'd like to figure out, via a formula, a quick way to grow the revenue from $0 to $10k per month by month 6Arithmetically, you can't.  There is no possible growth rate that gets from 0 to any other number, because you cannot divide by zero :)
0
Patrick MatthewsCommented:
What you can do is assume your starting point is 0.01.  Now the growth rate to get you from 0.01 to GoalAmount by the end of N periods is:=(GoalAmount/0.01)^(1/(N-1))-1
0
Patrick MatthewsCommented:
BTW, the rate that that formula above calculates is a per period rate; if the periods you are using here are months (i.e., going from 0.01 to 10,000 by the end of Month 6), then that rate is a monthly growth rate.
0
Cloud Class® Course: CompTIA Healthcare IT Tech

This course will help prep you to earn the CompTIA Healthcare IT Technician certification showing that you have the knowledge and skills needed to succeed in installing, managing, and troubleshooting IT systems in medical and clinical settings.

BBluAuthor Commented:
and how do I apply that to each month... for example we expect memberships to grow to a steady state of 28,633 by month 6.  What might the function be for each month (1-5; 6 = 28,633)?
0
Patrick MatthewsCommented:
How would that be calculated?  Linear, or geometric (which is what my formula will do)?
0
BBluAuthor Commented:
I assume N is the total number of periods.  Should there be a n for the current period.  Using your formula, what would the first and second months formulas be, for example?
0
Patrick MatthewsCommented:
See the attached example, which shows how to do assuming either geometric growth or linear growth.

Q-26401805.xls
0
BBluAuthor Commented:
Perfect!! Are you a mathematician or something? :)
0
Patrick MatthewsCommented:
Nope, just a finance major in a different life :)
0
BBluAuthor Commented:
one question: shouldn't the .01 be in period 0?  how would the formula change if that was the case>
0
BBluAuthor Commented:
LOL.  Wow, I have an MBA and couldn't get that one... boy, do I feel like I wasted my money.  LOL
0
Patrick MatthewsCommented:
>>one question: shouldn't the .01 be in period 0? how would the formula change if that was the case>

Have a look here:
Q-26401805.xls
0

Experts Exchange Solution brought to you by

Your issues matter to us.

Facing a tech roadblock? Get the help and guidance you need from experienced professionals who care. Ask your question anytime, anywhere, with no hassle.

Start your 7-day free trial
BBluAuthor Commented:
Got it.  Thank you.
0
BBluAuthor Commented:
Thank you very much.
0
It's more than this solution.Get answers and train to solve all your tech problems - anytime, anywhere.Try it for free Edge Out The Competitionfor your dream job with proven skills and certifications.Get started today Stand Outas the employee with proven skills.Start learning today for free Move Your Career Forwardwith certification training in the latest technologies.Start your trial today
Microsoft Excel

From novice to tech pro — start learning today.