CAGR Calculator
Calculate compound annual growth rate from start and end values
Investment Details
Formula
CAGR = (End / Start) ^ (1 / n) − 1
Result
Enter start value, end value, and years to calculate CAGR
Frequently asked questions
What is CAGR?
CAGR stands for Compound Annual Growth Rate. It represents the rate at which an investment would have grown if it grew at the same rate every year. It smooths out year-to-year volatility to give a single annualized return figure.
What is the CAGR formula?
CAGR = (Ending Value / Starting Value) ^ (1 / Number of Years) − 1. The result is expressed as a percentage. For example, $10,000 growing to $18,000 in 5 years gives CAGR = (18000/10000)^(1/5) − 1 ≈ 12.47%.
How is CAGR different from average annual return?
CAGR is the geometric mean return — it accounts for compounding. Average annual return is the arithmetic mean and ignores compounding effects. For volatile investments, CAGR is almost always lower than the simple average, and is the more accurate measure of actual investment growth.
When should I use CAGR?
Use CAGR when comparing investments over different time periods, evaluating historical portfolio performance, or projecting future value of an investment at a consistent growth rate. It's the standard metric used by financial analysts and fund managers.