Investing Basics

What Is CAGR?

Compound annual growth rate (CAGR) is the constant yearly rate at which a value would have to grow to go from a starting amount to an ending amount over a given number of years. It smooths out year-to-year swings into a single annual figure and is widely used to describe the growth of revenue, prices, or investment values.

CAGR Formula

CAGR = (ending value ÷ starting value)^(1 ÷ number of years) − 1.

Example

A value that grows from 10,000 to 16,105 over 5 years has a CAGR of about 10% per year.

What CAGR Does Not Show

CAGR describes the overall path from start to end but hides volatility along the way; two series with the same CAGR can have very different ups and downs.

🧮 Calculate It Yourself

Put Compound Annual Growth Rate (CAGR) into practice with these free calculators — no sign-up, nothing stored.

📈 CAGR Calculator Find your investment's true annualized return. Calculate → 📐 ROI Calculator Return on investment, net gain, and annualized ROI — any currency. Calculate → 📈 Compound Interest Calculator See how your money grows with compound interest and regular monthly contributions. Calculate →

🔗 Related Terms

Return on Investment (ROI) Compound Interest Rule of 72 Real Rate of Return

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Last updated: September 27, 2026. This definition is for general educational purposes only. It is not financial, investment, tax, legal, or medical advice, and it does not recommend any product or course of action. For decisions about your own situation, consult a qualified professional.