Result
CAGR
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This calculation is for informational purposes only and does not replace advice from a qualified professional. Formulas and rates may not fit your exact situation — double-check the figures before making decisions.
How it is calculated
CAGR = ((ending value ÷ beginning value) ^ (1 ÷ years) − 1) × 100%. It's a compound growth rate: applying it every year to the already-grown value from the year before lands exactly on the ending value after the full period.
CAGR isn't the arithmetic average of yearly growth rates. For example, +100% in year one and −50% in year two average out to +25% arithmetically, but the figure actually ended up right back where it started — CAGR correctly shows 0% here.
The figure smooths out real volatility: if growth swung wildly year to year, CAGR shows a comfortable smooth curve without telling you about the dips along the way. For assessing risk, look at CAGR alongside the year-by-year numbers, not instead of them.
Total growth over the period (unlike CAGR) ignores time entirely — it's just (ending − beginning) ÷ beginning × 100%. It shows how much the figure grew in total, while CAGR shows how fast.