CAGRCalculator

Understanding CAGR

Compound Annual Growth Rate (CAGR) is the mean annual growth rate of an investment over a specified period longer than one year. It represents one of the most accurate ways to calculate and determine returns for individual assets, investment portfolios, or anything that can rise or fall in value over time.

Formula

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

Key Points

• CAGR smooths out volatility — it assumes steady growth
• Actual returns may vary significantly year to year
• Higher CAGR generally means higher risk
• Use CAGR to compare different investments fairly