CAGR Calculator
Calculate the smooth annualized compound growth rate (CAGR) of any investment or business metric over multiple years.
Calculator Inputs
LiveHow to use the CAGR Calculator
- 1Enter the initial starting value (beginning balance).
- 2Enter the final ending value.
- 3Enter the total number of elapsed years.
- 4Review the annualized CAGR percentage and total percentage growth.
How CAGR is Calculated
CAGR dampens intermediate volatility to provide the constant annual rate at which an investment would have grown if it grew steadily.
Ending Value is final worth, Beginning Value is start capital, and Years is the duration.
- 1Ratio = 120,000 / 50,000 = 2.40
- 2Power = (2.40)^(1 / 6) = 1.1571
- 3CAGR = (1.1571 - 1) × 100 = 15.71%
What affects CAGR results
- Accurate start and end valuation dates.
- Exclusion of intermediate cash deposits or withdrawals (use XIRR if irregular cash flows exist).
- Terminal market peaks or troughs.
Frequently Asked Questions
When should I use CAGR instead of simple ROI?
Use CAGR whenever comparing investments with different multi-year horizons to normalize returns onto an annual playing field.
Does CAGR account for interim volatility?
No. CAGR calculates the theoretical steady geometric growth rate between two endpoints and does not reflect year-to-year swings.
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