Compound Annual Growth Rate (CAGR) Calculator

Whats CAGR ?

CAGR stands for Compound Annual Growth Rate, and it is a measure used to calculate the geometric progression ratio that provides a constant rate of return over a specified time period. It is commonly used in finance to describe the mean annual growth rate of an investment over a certain period, assuming that the investment grew at a steady rate each year.

The formula to calculate CAGR is:

CAGR = (Final Value / Initial Value)^1/n - 1

Where:

• Initial Value: the value of the investment at the beginning of the period..
• Final Value: the value of the investment at the end of the period.
• n: The length of time the money invested, expressed in years.

For example, let's say you invested $1,000 at the beginning of the year, and it grew to $1,500 at the end of the year. The CAGR would be calculated as follows:

CAGR = (1,500 / 1,000)^1/n - 1
So, the CAGR would be 50%.

Keep in mind that CAGR assumes a steady rate of growth, and in reality, investment returns can vary from year to year.