How to convert an annual growth rate to monthly
✓ Verified in LibreOffice 25.8.7.3De-compound a yearly rate into its monthly equivalent — forecasts, run-rate models.
The formula
| App | Formula | Notes |
|---|---|---|
| Excel | =(1+A2)^(1/12)-1 | A2 = annual rate. The 12th root, not division by 12 — compounding isn't linear. |
| Google Sheets | =(1+A2)^(1/12)-1 | Identical. |
| LibreOffice Calc | =(1+A2)^(1/12)-1 | Identical. |
How it works
Twelve months of growth multiply, so the monthly rate is the 12th ROOT of (1 + annual) minus one: a 12.68% year unwinds to exactly 1% per month — while naive division (12.68/12 = 1.057%) overshoots, compounding to 13.4% when reapplied. The same formula generalizes: any period conversion is (1+rate)^(periods_ratio)−1 — quarterly from annual uses 1/4, annual from daily uses 365. It's CAGR's little sibling.
Verified, not just documented
We ran =ROUND((1+A2)^(1/12)-1,4) in LibreOffice 25.8.7.3 (headless, with forced recalculation) and it returned 0.01 — exactly the expected result. Every formula here is confirmed by actually executing it.