This free online calculator will calculate the compound annual growth rate (CAGR) given the beginning value of an investment, the ending value, and the number of years that separate the two values.
Plus, the calculated results will also include the step by step process the calculator used to calculate CAGR, along with an annual growth chart showing how the investment would grow if the return rate were fixed over the entered number of years.
If you aren't familiar the CAGR, what it's useful for, or how to calculate it, it may be worth your time to read the explanation provided below before using the calculator.
CAGR is an acronym for Compound Annual Growth Rate, which is a formula used to estimate the annual return rate an investment would need to earn in order to grow from a given beginning value to a given ending value.
The CAGR calculation is primarily useful for the following three scenarios:
When it comes to calculating CAGR, you basically have 3 options: a spreadsheet function, an online calculator like the one on this page, or a handheld calculator capable of raising a base number to a fractional power.
If you are attempting to use a spreadsheet to calculate CAGR (Excel, OpenOffice, etc.), I use the RRI function, which calls for the following inputs:
If you are attempting to calculate CAGR manually using a handheld calculator, here is the formula and an example showing the steps to solving it.
|Example: PV = 1000, FV = 2000, n = 10 (years)|
|#1||Divide FV by PV:||2000 ÷ 1000||= 2.00000|
|#2||Raise Step #2 to the power of 1/n (n = yrs):||(2.00000)1/10||= 1.07177|
|#3||Subtract 1 from Step #2:||1.07177 − 1||= 0.07177|
|#4||Multiply Step #3 by 100:||0.07177 × 100||= 7.17735|
|#5||Round Step #4 and add % sign:||CAGR||= 7.177%|
With that, let's use the CAGR Calculator to calculate the rate of return from an investment.
Check Out My Other Super
To Help You To
Calculate Your ...
CAGR: Acronym that stands for Compound Annual Growth Rate.
Initial investment: Enter the amount of the initial investment (also referred to as Present Value, or PV).
Current or future value of investment: Enter the current or target future value of the investment.
Number of years: Enter the number of years between the initial investment and the current value or target future value.
Compound annual growth rate (CAGR): Based on your entries, this is the compound annual growth rate of the investment.