CAGR Formula
The Compound Annual Growth Rate (CAGR) formula calculates the smoothed annual rate of return an investment has grown over a specified period, assuming all profits were reinvested. It provides a single, consistent growth rate.
Formula
Copy the exact expression or work through it step by step below.
CAGR = (Ending Value / Beginning Value) ^ (1 / Years) - 1 Variables
CAGR
CAGR
The cagr value plugged into the cagr calculation.
EV
Ending Value
The ending value value plugged into the cagr calculation.
BV
Beginning Value
The beginning value value plugged into the cagr calculation.
t
Years
The time horizon applied to the cagr formula.
Step By Step
- 1
Set the baseline case with the real calculator inputs.
Start Value = $10,000, End Value = $25,000, Years = 5
- 2
Translate rates, periods, and cash values onto the same footing before combining them.
Keep the cagr assumptions consistent instead of mixing monthly and annual views.
- 3
Apply the formula and read the first calculator outputs, not just the headline assumption.
The calculator lands with cagr at 0.2 and total return percent at 150.0%.
- 4
Run one changed scenario so the formula is stress-tested before it is trusted.
The cagr calculator page is the fastest way to compare that second case.
Worked Example
CAGR sample case
Start Value
$10,000
End Value
$25,000
Years
5
CAGR = (Ending Value / Beginning Value) ^ (1 / Years) - 1 using start value $10,000, end value $25,000, years 5.
The calculator lands with cagr at 0.2 and total return percent at 150.0%.
Common Variations
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Sources & References
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