CAGR Calculator
Compound annual growth rate between a start and end value over several years.
Result
CAGR (%)
14.87
How it works
CAGR is the single constant growth rate that would take a starting value to an ending value over a given number of years: (end ÷ start)^(1÷years) − 1. Growing 10,000 into 16,105 over 5 years is a CAGR of 10%. Its value lies in smoothing. Real growth is jagged — +30%, −10%, +25% — and the arithmetic average of those numbers is misleading. CAGR gives the equivalent steady rate, which is the only fair way to compare investments, revenues or user bases over different periods. But the smoothing is also its blind spot: CAGR says nothing about volatility. Two investments with the same 10% CAGR can have wildly different rides, one steady and one halving before tripling. Note also that it is not the arithmetic mean of annual returns — that average always overstates the true compounded result.
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Frequently asked questions
What is CAGR used for?
To compare the average yearly growth of investments, revenue or any value over time.
Is CAGR the same as average return?
No — CAGR is the geometric (compounded) rate, usually lower than a simple average of yearly returns.
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