CAGR Calculator
Compound Annual Growth Rate
Enter values to see CAGR
CAGR or Compound Annual Growth Rate measures the mean annual growth rate of an investment over a specified period longer than one year, assuming profits are reinvested each period. Unlike simple average returns, It smooths out volatility, providing a clear, steady percentage representing how much an investment grew each year, making it ideal for comparing different investment performances over time.
How CAGR Works?
CAGR calculates the annual rate at which an investment would have grown if it expanded steadily each year, ignoring short-term volatility. The formula is:CAGR = (Ending value ÷ beginning value)(1/period)-1).
For example, an investment growing from 10,000 to 15,000 over 5 years has a CAGR of 8.45%, meaning it compounded at that rate annually despite any fluctuations.