CAGR Calculator
Calculate the Compound Annual Growth Rate (CAGR) between a start and end value over N years. Shows average annual growth of investments, revenue or KPIs. Everything in your browser.
CAGR (compound annual rate)
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Total growth
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Year-by-year projection
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What is CAGR?
CAGR (Compound Annual Growth Rate) answers one direct question: at what constant rate, year after year, would the initial value have to grow in order to reach the final value within the term you entered?
Formula: CAGR = ((Final / Initial)^(1/years) - 1) × 100. What makes it more useful than total growth is that it puts investments with different terms on the same yardstick — the annual rate — and only then can you compare them.
The whole calculation runs in your browser.
CAGR: Compound Annual Growth Rate
CAGR (Compound Annual Growth Rate) is the constant yearly rate that would carry an initial value to a final value over n years: CAGR = (V_final / V_initial)^(1/n) − 1. Think of it as smoothing the returns as if growth had been steady the whole way. Example: R$ 10,000 growing to R$ 16,105 over 5 years gives CAGR = (1.6105)^(1/5) − 1 = 10%. Where it beats a plain arithmetic average is in handling compounding. Take a portfolio that does +50% then −50%: the arithmetic mean reads 0%, but the CAGR comes out around −13.4%, because you really did lose money. What it won't tell you is anything about volatility, since it assumes smooth growth. For bumpy investments, pair it with standard deviation or the Sharpe Ratio.
Applications and context
You'll see CAGR everywhere people compare investment funds across different horizons, project company revenue, build a valuation (the Gordon growth model, P = D / (r − g), is one example), or size a market with a TAM CAGR. And when you need to annualize a multi-year ROI so durations line up, this is the number to use.
FAQ
CAGR vs arithmetic average, which is right? For compounded returns, the geometric mean (CAGR) is the honest figure. The arithmetic average inflates the real return whenever there's any volatility in play.
Does CAGR include dividends? Only when you compute it on total return, meaning price plus reinvested dividends. Run it on price alone and you'll undercount the true return of any dividend-paying asset.
Can CAGR be negative? It can. Whenever the final value ends up below the initial one, CAGR turns negative and shows an annualized loss.
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The results provided by this tool are for general informational and educational purposes only and do not constitute professional, financial, medical, legal, tax or accounting advice. Always confirm important decisions with a qualified professional and official sources.