CAGR Calculator
CAGR is the steady yearly growth rate that would take a value from where it started to where it ended. It is the standard way to compare investments over different periods.
Results
CAGR
12.14%
- Total growth
- 150%
- Growth multiple
- 2.5 ×
- Years
- 8
Growing from 100,000 to 250,000 over 8 years is a CAGR of 12.14%.
Show the calculation steps
- Growth multiple = end ÷ start = 250,000 ÷ 100,000 = 2.5.
- Years = 8.
- CAGR = (end ÷ start)^(1 ÷ years) − 1 = 2.5^(1 ÷ 8) − 1 = 12.14%.
- CAGR smooths growth into one steady yearly rate. It ignores the ups and downs along the way and any money added or withdrawn.
What CAGR means
Real returns bounce around from year to year. CAGR replaces them with one smooth rate that gives the same start-to-end result. It is a summary, not a promise: the path taken is ignored.
Where CAGR is used
Investors use it for mutual fund and stock returns, and businesses use it for revenue or user growth. It works for any positive values, in any unit.
Formula
CAGR = (Ending value ÷ Beginning value)^(1 ÷ years) − 1
Where:
- Ending value
- = Value at the end of the period
- Beginning value
- = Value at the start of the period
- years
- = Length of the period in years
Example calculation
Growth from 1,00,000 to 2,50,000 over 8 years
Inputs
- Beginning Value
- 100000
- Ending Value
- 250000
- Period
- 8 years
Result
- CAGR
- 12.14%
- Total growth
- 150%
- Growth multiple
- 2.5 ×
- Years
- 8
Step-by-step
- Growth multiple = end ÷ start = 250,000 ÷ 100,000 = 2.5.
- Years = 8.
- CAGR = (end ÷ start)^(1 ÷ years) − 1 = 2.5^(1 ÷ 8) − 1 = 12.14%.
Important notes
- CAGR ignores money added or withdrawn along the way. If you invest regularly, use the XIRR calculator instead.
Disclaimer: This calculator provides estimates for informational purposes and should not be considered financial advice. Actual figures from lenders, banks and investment products can differ because of fees, taxes, rounding rules and changing rates. Consult a qualified professional before making financial decisions.
Frequently asked questions
How is CAGR calculated?
CAGR = (ending value ÷ beginning value)^(1 ÷ years) − 1.
What is the difference between CAGR and average return?
The average return adds up yearly returns and divides by the number of years, ignoring compounding. CAGR gives the rate that reproduces the actual end result.
Can CAGR be negative?
Yes, when the ending value is lower than the beginning value.
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