Compound Annual Growth Rate (CAGR) Calculator

This CAGR calculator will help you find out how much the compound annual growth rate will be for your investment for a certain time period.

Steps for using the CAGR calculator:

1. State your investment's initial value
2. State your investment's final value
3. State your investment's time period in years
4. Click "Calculate" to see the CAGR.

What does CAGR mean?

CAGR refers to the Compound Annual Growth Rate. This measures how much an investment will grow annually over time, accounting for compounding interest. It can be utilized to determine and assess an investment's past performance or predict the returns it could make in the future. CAGR lets you generate an accurate Return on Investment (ROI) rate for whichever investment period you require.

CAGR Formula

You can calculate the CAGR using your investment's initial value, final value, and time period, i.e., the number of compounding years. To perform the calculation, divide the final value by the initial value. Then, raise the result to the inverse number of years. Finally, subtract 1 from the interim result.

Compound Annual Growth Rate (CAGR)  =  ( FV / IV )^1/n − 1

Where:

FV = Final Value, IV = Initial Value, n = Number of Years.

For example, if the Initial Value (IV) is 1000, Final Value (FV) is 5000, and the investment period (n) is 10 years, then the Compound Annual Growth Rate (CAGR) can be calculated as follows:

CAGR = (5000 / 1000)^1/10 − 1 = .17462 = 17.46%