CAGR Calculator

Our CAGR calculator computes the Compound Annual Growth Rate, showing your investment's annual growth over time at a steady rate. Input starting and ending values and the period to get a percentage that simplifies performance evaluation and comparison..

Note: The calculation assumes 12 months in a year and 365 days in a year.


What is CAGR?

CAGR, or Compound Annual Growth Rate, is a metric used to measure the annual growth rate of an investment, a company's sales, or any value that changes over time. It represents the steady percentage rate at which something would need to grow each year to go from its initial value to its final value over a specific period, assuming the growth compounds annually.

In simpler terms, CAGR smooths out the growth over multiple years into a single average annual rate. It's widely used in finance and business to compare the performance of investments or to assess how quickly a company is growing.



How Does CAGR Work?

Imagine you invest some money, and over a few years, it increases in value. CAGR tells you the consistent yearly growth rate that would take you from your starting amount (the beginning value) to your final amount (the ending value) over that time period. The key idea is compounding, meaning the growth builds on itself each year - like earning interest on interest.

For example:
• You invest £100, and after 3 years, it's worth £133.10.
• CAGR calculates the annual growth rate that turns £100 into £133.10 over those 3 years.