Investment
CAGR Calculator
Enter the starting and ending values to find their equivalent annual growth rate.
Results
Start with your numbers
Review or adjust your inputs, then calculate to see your results and interpretation.
Understand this calculation
CAGR smooths a changing growth path into one equivalent annual rate; it does not show year-by-year volatility.
See calculation method and assumptions
Formula
CAGR
CAGR equals ending value divided by beginning value, raised to one over the number of years, minus one.
Variables, rates and periods
- PV / FV
- Positive beginning and ending values in the same units.
- n
- Years between the two endpoints. CAGR is an equivalent annual rate and does not describe fluctuations.
Convert growth over a period into an equivalent annual rate.
Worked example
- Enter a beginning value of 100,000 and an ending value of 150,000.
- Set the period to five years.
- The result is about 8.45% CAGR and 50% total return; 8.45% is the smoothed annual equivalent.
Frequently asked questions
Is CAGR the same as average annual return?
No. CAGR reflects compounding; an arithmetic average can overstate accumulated growth.
Can the beginning value be zero?
No. The formula divides by the beginning value.
Does CAGR account for contributions?
No. For interim cash flows, consider a method such as IRR.