CAGR Calculator
Calculate the compound annual growth rate between a starting and ending value.
Smoothing growth into one rate
CAGR, the compound annual growth rate, expresses the growth between a start and end value as a single steady annual rate, as if it had grown evenly each year. This works it out from the beginning value, ending value and number of years, giving a clean figure to compare investments or business growth.
Enter the start and end values and the period to see the CAGR.
Why CAGR beats a simple average
CAGR is more honest than averaging yearly growth rates, because it accounts for compounding — an investment that rises 50% then falls 50% has not broken even, and CAGR captures that where a naive average would not. It smooths out the bumpy real path into the equivalent steady rate, which makes very different investments comparable on one number. Its limitation is exactly that smoothing: it hides the volatility along the way, so two investments with the same CAGR could have had wildly different, and differently risky, journeys. It is an excellent summary of overall growth, best paired with an awareness of how bumpy the ride was. This is a calculation, not investment advice.
Questions & answers
Why use CAGR instead of averaging yearly returns?
Because it accounts for compounding — a 50% gain then a 50% loss is not break-even, and CAGR reflects that where a simple average misleads.
What does CAGR hide?
The volatility along the way — two investments with the same CAGR could have had very different, differently risky paths.
Is this investment advice?
No — it is a calculation of a growth rate. Investment decisions are for your own judgement or a qualified adviser.