Investment
CAGR Calculator
Convert growth over a period into an equivalent annual rate.
Results
A clear summary of your calculation.
Enter values and press Calculate to see an explanation.
INTERPRETATION
What does this mean?
CAGR smooths a changing growth path into one equivalent annual rate; it does not show year-by-year volatility.
Read the learning guide →FORMULA
Formula
CAGR equals ending value divided by beginning value, raised to one over the number of years, minus one.
WORKED EXAMPLE
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.