🚀 CAGR Calculator (Compound Annual Growth Rate)
Enter your starting value, ending value, and the number of years to calculate the compound annual growth rate (CAGR) of an investment.
What Is CAGR?
The Compound Annual Growth Rate (CAGR) is the smoothed, constant annual rate at which an investment would have needed to grow, compounding every year, to go from its starting value to its ending value over a given period. It levels out the year-to-year volatility of actual returns into one representative average rate.
The Formula
CAGR is calculated as CAGR = (End Value / Start Value)^(1 / years) − 1, expressed as a percentage. For example, an investment growing from $10,000 to $20,000 over 5 years has a CAGR of about 14.87%, even though actual yearly returns likely varied.
Why It’s Useful
CAGR is widely used to compare the historical performance of investments, business revenue, or other metrics across different time periods on an apples-to-apples basis, since it strips out the noise of fluctuating annual returns.
- For general financial planning and educational purposes only, not investment advice.
- CAGR is a smoothed average; it does not reflect volatility or the actual path of returns along the way.