CAGR Calculator
Works out the steady annual growth rate between two values, which also gives the rate implied by any start and end amount.
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The formula
CAGR = (end ÷ start)^(1 ÷ years) − 1
It solves the compound growth formula for the rate. It also gives the interest rate implied by any two values.
What to watch out for
Averaging the yearly returns overstates growth when values swing: a 50% loss followed by a 50% gain averages 0% but leaves you down 25%.
Frequently Asked Questions
How do I calculate CAGR?
Divide the end value by the start, raise to 1 ÷ years, and subtract 1. 10,000 to 18,000 over 5 years is 12.47%.
Why is CAGR lower than the average return?
Because a simple average ignores compounding, and losses need larger gains to recover. CAGR reflects what actually happened to the money; the simple average does not.