CAGR Calculator
The steady yearly growth rate that takes a value from where it started to where it ended.
Decimals are fine, for example 2.5 for two and a half years.
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CAGR smooths out the ups and downs, so the real path of an investment will not be a straight line. Past growth does not predict future returns.
Frequently asked questions
What is CAGR?
CAGR (compound annual growth rate) is the single yearly rate that would take a starting value to an ending value if it grew by the same percentage every year. It is the standard way to compare investments, sales, savings or any figure that changes over several years.
What is the CAGR formula?
CAGR = (Ending value ÷ Starting value)^(1 ÷ years) − 1. For example, 1,00,000 growing to 2,50,000 in 8 years is (2.5)^(1/8) − 1, about 12.1% a year.
Why not just divide the total growth by the number of years?
Because growth compounds. A 150% total gain over 8 years is not 18.75% a year; it is about 12.1% a year, since each year's growth is earned on a bigger base. CAGR gives the true yearly rate.
Can CAGR be negative?
Yes. If the ending value is lower than the starting value, CAGR is negative, showing the steady yearly rate of decline.