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.
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.
FAQs
1. How to calculate CAGR?
- Final Value - value of the investment at the end of the period.
- Initial Value - value of the investment at the initially of the period.
- N - total number of years (can be fractional)
2. Practical use of CAGR.
CAGR is used to evaluate and compare the historical growth rates of different investment opportunities, such as stocks, mutual funds, retirement portfolios, growth of a product's sales over time, inflation and many more.
- Comparing Investments - Use CAGR to compare the performance of different investments (stocks, mutual funds, real estate) over the same or different time horizons.
- Evaluating Performance - Assess the historical growth of a business or a specific asset.
- Forecasting - Use historical CAGR as a basis for projecting future growth scenarios.