CAGR Calculator
CAGR, or compound annual growth rate, is the steady yearly rate that takes a starting value to an ending value over a set number of years. Real growth rarely runs at one rate, so CAGR smooths out the ups and downs.
- Free
- Works offline after your first visit
- Saves on this device
- No sign-up
- Updated
How it works
Divide the ending value by the starting value, raise the result to the power of one divided by the number of years, then subtract one. Multiply by 100 for a percentage.
The result assumes growth compounds each year. It describes the two end points only, not the path between them.
Worked example
Growing from $10,000.00 to $18,000.00 over 5 years is a total change of 80%, which works out to a steady yearly rate of 12.47%.
Questions
Why not just average the yearly returns?
An average of yearly returns can overstate growth. CAGR gives the single rate that actually turns the start into the end.
Can the ending value be lower?
Yes. A lower ending value gives a negative CAGR, which means the value shrank by that much each year on average.
Does CAGR count deposits or withdrawals?
No. It uses only the two values, so money added or taken out along the way changes the real result but not this one.
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