Compound Annual Growth Rate
Calculate compound annual growth rate.
Compound Annual Growth Rate measurements
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Result
How to calculate compound annual growth rate
Compound Annual Growth Rate (CAGR) finds the smoothed annual growth rate of an investment over multiple years, accounting for compounding.
How the calculation works
CAGR = ((Ending value ÷ Beginning value)^(1÷Years) − 1) × 100.
Example
$10,000 growing to $16,000 over 5 years: ((16,000÷10,000)^(1/5)−1)×100 ≈ 9.86%.
Frequently asked questions
How is Result calculated?
Result = (pow([Ending value] ÷ [Beginning value], 1 ÷ [Years]) − 1) × 100.
Is the Compound Annual Growth Rate free to use?
Yes — every calculator on Simple Calculator Tools is free, runs in your browser, and does not require an account.
Compound Annual Growth Rate
CAGR = ((Ending value ÷ Beginning value)^(1÷Years) − 1) × 100.
Let's understand your compound annual growth rate result.
Calculate a result above and this guide will help you interpret it using this calculator's own formula and explanation.
Pro Tips for Compound Annual Growth Rate
- CAGR smooths out year-to-year volatility into a single average rate — actual annual returns likely varied significantly above and below this figure.
- Use CAGR to fairly compare investments held over different time periods, since it normalizes for compounding.
Common Compound Annual Growth Rate Mistakes to Avoid
- Treating CAGR as the actual return in any single year, when it's a smoothed average that masks real year-to-year volatility.
When to Use This Calculator
Compound Annual Growth Rate (CAGR) finds the smoothed annual growth rate of an investment over multiple years, accounting for compounding.