CAGR Calculator

What CAGR Tells You

Suppose an investment grew from 1,000 to 2,000 over 5 years. It almost certainly did not grow the same amount each year - real markets jump around - but CAGR answers: what single, steady yearly rate would have taken it there? It is the smooth, imaginary growth rate that lands on the exact same finish.

That makes CAGR ideal for comparing investments held for different lengths of time, because everything is expressed as one yearly rate. The bar under the calculator shows the starting value (blue) and how much growth was added (green) to reach the end.

CAGR Formula

$$\text{CAGR} = \left(\frac{\text{final}}{\text{initial}}\right)^{1/\text{years}} - 1$$

How to Use It

1. Enter the initial value, the final value, and the number of years.
2. Read the CAGR.

Worked Examples

Initial	Final	Years	CAGR
1000	2000	5	14.87%
1000	1100	1	10%
10000	40000	10	14.87%
5000	5000	3	0%

FAQ

What is CAGR?

The constant annual rate that would take the initial value to the final value over the period, as if it grew smoothly each year.

How is CAGR different from ROI?

ROI is the total return over the whole period; CAGR expresses it as an equivalent smoothed yearly rate, so different time spans can be compared.

Is CAGR the same as the average annual return?

Not quite. CAGR is the geometric (compounded) rate, which accounts for compounding, unlike a simple average of yearly returns.