Compound Annual Growth Rate (CAGR)
Measure the geometric progression ratio that provides a constant rate of return over a time period.
Σ The Formula
Real World Examples
# About This Calculator
The Compound Annual Growth Rate (CAGR) is one of the most accurate ways to calculate and determine returns for anything that can rise or fall in value over time.
Investors use CAGR to compare two alternative investments. For example, if one investment returned 10% then -5% then 20%, its average return is deceiving. The CAGR provides a "smoothed" annual rate that represents what the investment would have returned if it grew at a steady rate each year.
Note: CAGR does not reflect investment risk; it only measures the smoothed historical or projected return.
How To Use
- Enter the **Beginning Value** (Starting investment).
- Enter the **Ending Value** (Current or target value).
- Enter the **Number of Years** (The time elapsed).
- The result is the annual growth rate required to reach that end value.
Frequently Asked Questions
How is CAGR different from Average Return?+
Can CAGR be negative?+
Is Compound Annual Growth Rate (CAGR) free to use?+
How accurate is Compound Annual Growth Rate (CAGR)?+
Can I use Compound Annual Growth Rate (CAGR) on my phone?+
Do you save my data?+
About
The Compound Annual Growth Rate (CAGR) is one of the most accurate ways to calculate and determine returns for anything that can rise or fall in value over time.
Investors use CAGR to compare two alternative investments. For example, if one investment returned 10% then -5% then 20%, its average return is deceiving. The CAGR provides a "smoothed" annual rate that represents what the investment would have returned if it grew at a steady rate each year.
Note: CAGR does not reflect investment risk; it only measures the smoothed historical or projected return.