CAGR Calculator
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Compound Annual Growth Rate
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About CAGR
How it works
The Compound Annual Growth Rate (CAGR) measures the mean annual growth rate of an investment over a specified time period longer than one year. Unlike an average annual return, which can be skewed by volatility, CAGR assumes the investment grew at a steady rate every year. It represents the geometric progression ratio that provides a constant rate of return over the time period.
Why it is important
CAGR is one of the most accurate ways to calculate and determine returns for individual assets, portfolios, and anything that can rise or fall in value over time. It effectively 'smooths out' the volatility of periodic returns, making it an essential metric for comparing the performance of two investments with different histories.