HesapHanem

CAGR (Compound Annual Growth Rate) Calculator

What is my annual growth rate?

Result

13.09%
85.00%

How it is calculated

The rate is the growth factor taken to the power of one over the number of years: CAGR = (End / Begin)1/Years − 1, shown as a percentage. Begin and End are values in the same currency or unit, and Years is the holding period (decimals such as 2.5 work). The tool also reports the total growth, (End / Begin − 1) × 100. Begin, End and Years must all be greater than zero, so a loss to zero or a negative value gives no result. Results are rounded to two decimals. The rate ignores deposits or withdrawals made along the way.

Worked example

An investment grows from 10,000 to 18,500 over 5 years. The growth factor is 18,500 / 10,000 = 1.85. Raise it to the power 1/5 (0.2) to get about 1.1309, then subtract 1. The compound annual growth rate is 13.09%. The total growth over the whole period is 85.00%, but spread evenly as a compounding yearly rate it is 13.09% per year.

Try this example →

Common mistakes

  • Dividing total growth by the years (85% / 5 = 17%) instead of compounding; this overstates the yearly rate.
  • Entering the number of data points (6 year-end values) instead of the number of periods between them (5).
  • Using months for Years without converting: 18 months is 1.5 years.
  • Treating CAGR as a promise for smooth returns; real years varied, and the figure ignores money added or withdrawn mid-period.
  • Starting from zero or a negative value, which the formula cannot handle.

Sources

About this calculator

This calculator finds the compound annual growth rate (CAGR) — the single steady annual percentage that would take a starting value to an ending value over a given number of years, smoothing out the ups and downs an investment actually went through along the way. It is the standard way to express multi-year investment performance as one comparable number.

Investors use it to compare the historical performance of stocks, funds or a business's revenue over different time periods on equal footing, since a simple total percentage gain does not account for the number of years it took to get there — a 50% gain over 3 years is very different from a 50% gain over 10.

Was this helpful?

You can pick up to 3 reactions.

Comments (1)

  • Editorial team

    CAGR smooths the journey into a single steady rate, so two investments with the same figure can have very different ups and downs along the way. It also ignores money added or withdrawn in between and is not adjusted for inflation. The period can be fractional, such as 2.5 years. Share the start value, end value and years if you want to compare notes on a result you got.

Popular calculators

Loan Calculator

Monthly payment, total interest and full amortization schedule.

Percentage Calculator

Percent change, percent of, and ratio calculations.

Discount Calculator

Calculate final price, savings, and discount amount.

BMI Calculator

Body mass index from height and weight (metric or imperial).

Age Calculator

Compute your exact age in years, months and days from a birth date.

Compound Interest Calculator

Calculate the final amount and interest earned with compounding.

All Calculators