CAGR Calculator
Use this CAGR calculator to find the Compound Annual Growth Rate of an investment. Enter your starting balance, ending value, and time period to calculate the steady annual return, making it easy to evaluate and compare past performance.
What is CAGR?
The Compound Annual Growth Rate (CAGR) measures the average yearly growth of an investment, business metric, or asset over a specific time period. Because real-world investments rarely grow at a fixed rate every single year, CAGR smooths out this volatility. It gives you the single, steady percentage rate that would be required to get from your initial starting balance to your final ending value.
CAGR formula source: Investopedia
How Compounding Works in CAGR
The key difference between simple average growth and CAGR is compounding - the process of earning returns on both your original money and the accumulated growth from previous years.
For example, if an investment grows over three years:
- You invest £100 as your beginning value.
- After exactly 3 years, the ending value is £133.10.
- The calculator determines the CAGR is 10%, meaning a steady 10% growth rate compounding annually turns that £100 into £133.10.