Compound Annual Growth Rate Calculator
Compute the compound annual growth rate (CAGR) between two values over any period. CAGR expresses the average annual rate at which an investment would have had to grow to go from its starting value to its ending value — a standard way to compare investments of different lengths and sizes.
Enter start, end and time
Enter beginning, ending and years, then press Calculate CAGR.
CAGR formula
CAGR = (Ending / Beginning)^(1 / Years) − 1
CAGR is expressed as a percentage. It represents the smoothed, annualised return an investment would have needed to achieve if it had grown at the same rate every year. In reality investments do not grow evenly — CAGR is a simplification that lets you compare performance across different time periods.
Interpretation
- Positive CAGR — the investment grew on average.
- Zero CAGR — the ending value equals the beginning value.
- Negative CAGR — the investment shrank on average.
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Frequently asked questions
No. Average annual return (the arithmetic mean of individual yearly returns) is different from CAGR (the geometric mean). For example, an investment that goes +50% then −50% has an arithmetic average of 0%, but its actual CAGR is −13.4% — because it ends 25% below where it started. CAGR is the more useful number for measuring investment performance over time.
Only if you include them in the ending value. If you are looking at a stock price, that excludes dividends. If you are looking at a total-return index (which reinvests dividends), that includes them. Always check whether the numbers you are comparing are price-only or total-return.