CAGR Calculator | Compound Annual Growth Rate Calculator
Calculate the Compound Annual Growth Rate (CAGR) of your investments to measure annualized returns over time with our free online calculator.
Category: Financial
The starting value of your investment
The ending value of your investment
The number of years between initial and final values
Frequently Asked Questions
What is CAGR (Compound Annual Growth Rate)?
CAGR (Compound Annual Growth Rate) is a measure of the mean annual growth rate of an investment over a specified time period longer than one year. It represents the rate at which an investment would have grown if it had grown at a steady rate, taking into account the compounding effect.
How is CAGR different from average annual return?
CAGR accounts for the compounding effect of growth, while average annual return is a simple arithmetic mean of yearly returns. CAGR gives you a smoothed rate that would take you from the starting value to the ending value if applied consistently each year, making it more accurate for measuring investment performance over time.
When should I use CAGR instead of other metrics?
Use CAGR when you want to measure and compare the performance of investments over multiple years, evaluate business growth rates, or analyze the long-term performance of assets. CAGR is particularly useful when investment returns or growth rates fluctuate significantly from year to year, as it provides a smoother, more representative growth rate.