CAGR Calculator
CAGR represents the smoothed annualized rate of return required for an investment to grow from its beginning balance to its ending balance over a given timeframe, dampening the volatility of year-to-year swings.
How to calculate: $50,000 grows to $120,000 over 6 years
n is the number of years between beginning and ending valuations.
About CAGR Calculator
CAGR represents the smoothed annualized rate of return required for an investment to grow from its beginning balance to its ending balance over a given timeframe, dampening the volatility of year-to-year swings.
Primary Purpose: Calculate Compound Annual Growth Rate across multiple periods
How to Use the CAGR Calculator
- 1Enter Starting Value (Beginning Balance).
- 2Enter Ending Value (Final Balance).
- 3Enter Number of Years or Periods.
- 4View the exact CAGR percentage.
Formula & Methodology
n is the number of years between beginning and ending valuations.
Real-World Worked Examples
$50,000 grows to $120,000 over 6 years
What Is CAGR and How Is It Calculated?
Understand Compound Annual Growth Rate (CAGR), why it outperforms arithmetic average return, and how to apply the formula.
Frequently Asked Questions
When should I use CAGR instead of average annual return?
Average return can be misleading due to compounding effects (e.g. +50% followed by -50% equals a net loss of 25%, not 0%). CAGR reflects true actual geometric growth.
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