CAGR Calculator
Compound Annual Growth Rate (CAGR) measures the geometric annual growth rate of an investment, revenue figure, or portfolio metric over multiple periods.
How it works
CAGR = ((ending value ÷ starting value)^(1 ÷ years) − 1) × 100. For example, growing an initial value of 10,000 to 20,000 over 3 years gives (20,000 ÷ 10,000)^(1/3) − 1 = 25.99% per year, representing a 100% total gain of 10,000.
Questions
What does CAGR tell you about growth?
CAGR smooths out yearly fluctuations to show the constant annual return rate required to grow the starting amount to the final amount.
Why use CAGR instead of average annual return?
Arithmetic average returns ignore compounding effects, whereas CAGR accounts for compounding across multiple consecutive years.
Can CAGR be negative?
Yes. If the ending value is lower than the starting value, the CAGR will be negative, representing an annualized loss.
Results are estimates for planning. They are not tax, legal or financial advice.
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