CAGR Calculator

Enter a starting value, an ending value and the number of years. You get the single annual rate that would have taken the first to the second.

CAGR
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Gain
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What CAGR is, and what it is not

  • It is the smoothed rate, not the actual path. An investment that went up 80% then down 30% has the same CAGR as one that grew steadily. CAGR describes the endpoints, never the ride between them.
  • It compounds, so it is not the average of yearly returns. Gaining 50% then losing 50% leaves you down 25%, not flat. Averaging the two would tell you nothing happened.
  • Years can be fractional. Eighteen months is 1.5. The formula does not require whole years.
  • A negative CAGR is a real answer. If the ending value is lower, the rate is negative, which is the correct description of a decline.
  • It needs a positive start. A growth rate from zero is undefined, not infinite — so the calculator declines rather than inventing a number.

The equivalent in Excel

=(end/start)^(1/years)-1, formatted as a percentage. Excel also has RRI, written =RRI(years, start, end), which does exactly this and is easier to read back.