What is CAGR?
CAGR stands for Compound Annual Growth Rate, a metric used to understand the mean annual growth rate of an investment or financial figure over a specified period. Unlike simple growth rates, CAGR factors in the compounding effect, providing a smoother and more realistic view of growth performance year-over-year.
How to use our CAGR Calculator:
CAGR calculator is straightforward. Simply input the initial value, the final value, and the number of years between them. View your results instantly.
Adjust inflation to evaluate the real value of your investment.
CAGR Formula
The Compound Annual Growth Rate (CAGR) formula calculates the constant rate at which an investment would have grown if it grew at a steady rate year over year.
The ending value of your investment at the end of the period
The starting value of your investment at the beginning
The total time period in years (can include fractions)
Example Calculation
If you invested $10,000 and it grew to $25,000 over 5 years:
CAGR = (25,000 / 10,000)^(1/5) - 1
CAGR = (2.5)^0.2 - 1
CAGR = 1.2011 - 1
CAGR = 0.2011 or 20.11%
This means your investment grew at an average rate of 20.11% per year over the 5-year period.
Real vs Nominal CAGR
Nominal CAGR
The raw growth rate without accounting for inflation. This is what you see in your account balance.
Real CAGR
The growth rate adjusted for inflation. This shows the true purchasing power of your investment returns.
Real CAGR Formula:
About CAGR calculator
Use this calculator to project what your current investment will grow to over a specified period, based on a compound annual growth rate (CAGR) and if you know the CAGR you can find the final investment value using Final value/Future value calculator. If you're looking to work backwards—to find how much you'd need to invest today to reach a future goal—see our Reverse CAGR calculator
Note on “Reverse CAGR” Terminology
Some sites mislabel a future-value calculator as a “reverse CAGR calculator.” In reality, “reverse CAGR” refers to solving for Initial value when Future value, CAGR, and time are known—the calculator dedicated to that purpose is on our Initial Investment Calculator.