CAGR Calculator - Calculate Your Investment Growth Rate

By Anowar

Reviewed by Jasmine

A compound annual growth rate (CAGR) calculator helps you calculate the average annual growth rate of an investment over a given period of time. If you are investing, CAGR is an essential metric, because it gives you a consistent rate of return.

When you are planning a stock investment or analyzing other financial data, CAGR provides you of overall growth performance.

CAGR feature Image
Image credit: Canva

That's why this calculator helps you calculate CAGR, and you can make decisions for your investments. So it is a valuable tool for you, whether you are an investor or a financial analyst.

However, to calculate CAGR, enter the initial, final value and the number of years, then click the button.

CAGR Calculator

Growth Visualization

What is CAGR?

Compounded Annual Growth Rate (CAGR) shows how much an investment grows every year over a certain period of time. It gives you returns at a steady rate rather than short-term fluctuations. Hence, CAGR is perfect for you to understand long-term growth.

How to Calculate CAGR

You can calculate CAGR by using the following formula:

CAGR = ((Final Value / Initial Value) ^ (1 / Years)) - 1.

This calculator automates this calculation, and gives you the CAGR in percentage format based on your inputs.

FAQs
CAGR, or Compound Annual Growth Rate, is a measure of the rate of return of an investment over a specific time period. In another way, you can say that the investment has grown at the same rate every year.
CAGR takes into account the compounding effect over time, and provides a smoothed growth rate despite any fluctuations.
When you are analyzing a long-term investments or comparing the growth rates of different investments over time.
You can use CAGR for short-term investments, but it is most accurate for long-term trends as it smooths out volatility.
No, CAGR is not the same as the simple rate of return, while both measure growth. CAGR calculates the compounding effect over time, and it more useful for understanding investments over multiple years.
Yes, CAGR can be negative if the investment has declined, and a negative CAGR indicates a loss rather than growth.
A good CAGR percentage varies by industry. Generally, a CAGR above 10% is considered strong, but it depends on the type of investment and economic conditions.
To improve your CAGR, diversify assets, reinvest returns, and choose investments with growth potential. Also, understand market trends that can help boost your investment performance.
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