Compound annual growth rate calculator

To calculate the compound annual growth rate (CAGR), follow these steps:

1. Find the beginning and ending values: Determine the initial value of your investment or asset (beginning value) and its final value (ending value) after a specific period.

2. Calculate the total return: Subtract the beginning value from the ending value to find the total return or total growth of the investment.

   Total Return = Ending Value – Beginning Value

3. Determine the number of periods: Identify the number of periods (usually years) over which the investment grew. For example, if you’re analyzing a 5-year investment, there are 5 periods.

4. Calculate the CAGR: Use the formula:

   CAGR = (Ending Value / Beginning Value)^(1 / Number of Periods) – 1

   Where:

   • Ending Value is the final value of the investment.
   • Beginning Value is the initial value of the investment.
   • Number of Periods is the total number of periods (years) over which the investment grew.
     
     

5. Convert to percentage: Multiply the result by 100 to express the CAGR as a percentage.