📈 CAGR Calculator
Calculate the Compound Annual Growth Rate — the smoothed annualized rate that takes an investment from its beginning to its ending value over a given period.
Enter your values
- Total growth70%
- Absolute gain / loss€7,000.00
- Growth multiple1.7
What this means
- Compound annual growth rate: 11.2%
- Total growth over the period: 70%
- Net gain / loss: €7,000.00
Visual results
Detailed breakdown
| Year | Value |
|---|---|
| 1 | €11,119.62 |
| 2 | €12,364.59 |
| 3 | €13,748.94 |
| 4 | €15,288.30 |
| 5 | €17,000.00 |
About this calculator
What CAGR tells you
CAGR (Compound Annual Growth Rate) answers: “If this investment grew at a perfectly steady rate every year, what would that rate be?” It smooths out year-to-year volatility and gives you a single annual rate for comparison.
The CAGR formula
CAGR = (Ending Value / Beginning Value)^(1/Years) − 1
If €10,000 grew to €17,000 in 5 years: (17,000/10,000)^(0.2) − 1 = 1.7^0.2 − 1 ≈ 11.19% per year.
CAGR vs average annual return
These are not the same. If a fund gains 50% in year 1 and loses 33% in year 2, the average return is 8.5% — but you’re back to where you started (1.5 × 0.67 ≈ 1.0). CAGR would correctly show 0%. Always use CAGR to measure actual growth.
Where CAGR is used
Business analysts use CAGR to report revenue growth. Fund managers use it to report track records. Investors use it to compare investments of different durations on equal terms.
Frequently asked questions
What is CAGR?
CAGR (Compound Annual Growth Rate) is the smoothed annual rate at which an investment grows from a beginning to an ending value, as if it grew at a steady rate each year. It strips out year-to-year volatility and gives a single comparable number.
How is CAGR calculated?
CAGR = (Ending Value / Beginning Value)^(1/Years) − 1. For example, an investment that grows from €10,000 to €17,000 over 5 years has a CAGR of (1.7)^(1/5) − 1 ≈ 11.19%.
When should I use CAGR vs simple ROI?
Use CAGR when comparing investments over different time periods, since it normalizes for duration. Use simple ROI for a quick absolute measure when the time period is the same or doesn't matter.