# Compound annual growth rate calculator

Our compound annual growth rate (CAGR) calculator helps you measure an investment’s annual growth rate over a specified period.

Page written by AI. Reviewed internally on June 25, 2024.

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5 years

This calculator is intended for illustration purposes only and exact payment terms should be agreed with a lender before taking out a loan.

Compound annual growth rate

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## How to calculate CAGR

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.