{"id":241,"date":"2025-05-09T15:43:14","date_gmt":"2025-05-09T12:43:14","guid":{"rendered":"http:\/\/wpcalc.com\/?p=241"},"modified":"2026-09-30T19:28:30","modified_gmt":"2026-09-30T16:28:30","slug":"compound-annual-growth-rate","status":"publish","type":"post","link":"https:\/\/wpcalc.com\/en\/finance\/compound-annual-growth-rate\/","title":{"rendered":"Compound Annual Growth Rate Estimator"},"content":{"rendered":"<section class=\"not-prose calculator-box\" aria-labelledby=\"calculator-title\"><div class=\"flex items-baseline sm:items-center justify-between gap-2 sm:gap-3\"><div class=\"flex flex-col sm:flex-row sm:items-center gap-2\"><span class=\"icon icon-calculator text-primary-700! text-base! dark:text-primary-300!\" aria-hidden=\"true\"><\/span><h2 id=\"calculator-title\" class=\"text-lg font-display font-bold\">Calculate CAGR for Investment Growth Over Time<\/h2><\/div><div class=\"calcdash-favorite group\">\n  <button type=\"button\" class=\"favorite\" id=\"favorite\" data-favorite-id=\"241\" data-favorite-title=\"Compound Annual Growth Rate\" data-favorite-url=\"https:\/\/wpcalc.com\/en\/finance\/compound-annual-growth-rate\/\" data-favorite-excerpt=\"Enter the initial value, final value and number of years to instantly calculate the Compound Annual Growth Rate (CAGR) \u2014 the smoothed annual return an investment would need to grow from start to finish with compounding.\" aria-label=\"Add to Favorites\" data-favorite-icon=\"icon icon-rate-up\">\n    <span class=\"icon icon-shape-star-empty\" aria-hidden=\"true\"><\/span>\n  <\/button>\n  <div class=\"calcdash-favorite__tip\" aria-hidden=\"true\">\n   <span class=\"favorite-tooltip\" id=\"favorite-tooltip\"><\/span>\n  <\/div>\n  <span class=\"sr-only\" role=\"status\" id=\"favorite-status\"><\/span>\n<\/div><\/div><form action=\"https:\/\/wpcalc.com\/en\/finance\/compound-annual-growth-rate\/\" method=\"POST\" class=\"calculator\" id=\"calculator-241\" data-post=\"241\"><fieldset class=\"fieldset-input\"><legend class=\"sr-only\">Input Fields<\/legend><div class=\"field has-term\" id=\"input-1\"><label for=\"field-1\">Initial Value<\/label><div class=\"term\">V_i<\/div>  <div class=\"absolute bottom-0 left-16 top-8 w-2 h-0.5 bg-blue-500\"><\/div><input type=\"text\" name=\"initial_value\" id=\"field-1\" aria-describedby=\"calc-unit-1 calc-info-1\" data-number inputmode=\"decimal\" autocomplete=\"off\" spellcheck=\"false\" min=\"0\" value=\"1000\"\/><div class=\"unit\" id=\"calc-unit-1\">$<\/div><small id=\"calc-info-1\">Enter the value at the start of the investment period<\/small><\/div><div class=\"field has-term\" id=\"input-2\"><label for=\"field-2\">Final Value<\/label><div class=\"term\">V_f<\/div>  <div class=\"absolute bottom-0 left-16 top-8 w-2 h-0.5 bg-blue-500\"><\/div><input type=\"text\" name=\"final_value\" id=\"field-2\" aria-describedby=\"calc-unit-2 calc-info-2\" data-number inputmode=\"decimal\" autocomplete=\"off\" spellcheck=\"false\" min=\"0\" value=\"2000\"\/><div class=\"unit\" id=\"calc-unit-2\">$<\/div><small id=\"calc-info-2\">Enter the value at the end of the investment period<\/small><\/div><div class=\"field has-term\" id=\"input-3\"><label for=\"field-3\">Number of Years<\/label><div class=\"term\">n<\/div>  <div class=\"absolute bottom-0 left-16 top-8 w-2 h-0.5 bg-blue-500\"><\/div><input type=\"text\" name=\"number_of_years\" id=\"field-3\" aria-describedby=\"calc-info-3\" data-number inputmode=\"decimal\" autocomplete=\"off\" spellcheck=\"false\" min=\"1\" value=\"5\"\/><small id=\"calc-info-3\">Enter the number of years the investment lasted<\/small><\/div><\/fieldset><div class=\"buttons\"><button type=\"submit\" data-text=\"Re-Calculate\" id=\"calculate-button\" data-post=\"241\">Calculate<\/button><button type=\"reset\">Reset<\/button><\/div><div class=\"field is-checkbox hidden!\" id=\"field-auto-calc\"><input type=\"checkbox\" id=\"auto-calc\"><label for=\"auto-calc\">Calculate automatically<\/label><small>If enabled, the result will update automatically when you change any value.<\/small><\/div><div class=\"fieldset-result is-hidden\" aria-labelledby=\"result-title\" aria-live=\"polite\" role=\"region\"> <h3 class=\"result-title bg-gradient-to-r from-primary-50 to-gray-50 dark:from-primary-900 dark:to-gray-800\" id=\"result-title\"><span class=\"icon icon-s-pulse\" aria-hidden=\"true\"><\/span> Your Results<\/h3><div class=\"result-box\"><div class=\"field-result\" id=\"output-1\"><span class=\"field-title\"><span>Compound Annual Growth Rate<\/span><\/span><span class=\"field-value\" id=\"result-1\" data-unit=\"%\"><\/span><button type=\"button\" class=\"copy-result\" data-tooltip=\"Copy Result\" aria-label=\"Copy Result\"><span class=\"copy-icon icon icon-document-copy\" aria-hidden=\"true\"><\/span><\/button><\/div><\/div><div class=\"result-actions\"><button type=\"button\" class=\"copy-link\"><svg viewBox=\"0 0 20 20\" fill=\"currentColor\" aria-hidden=\"true\"><path d=\"M12.232 4.232a2.5 2.5 0 0 1 3.536 3.536l-1.225 1.224a.75.75 0 0 0 1.061 1.06l1.224-1.224a4 4 0 0 0-5.656-5.656l-3 3a4 4 0 0 0 .225 5.865.75.75 0 0 0 .977-1.138 2.5 2.5 0 0 1-.142-3.667l3-3Z\"\/><path d=\"M11.603 7.963a.75.75 0 0 0-.977 1.138 2.5 2.5 0 0 1 .142 3.667l-3 3a2.5 2.5 0 0 1-3.536-3.536l1.225-1.224a.75.75 0 0 0-1.061-1.06l-1.224 1.224a4 4 0 1 0 5.656 5.656l3-3a4 4 0 0 0-.225-5.865Z\"\/><\/svg><span class=\"copy-link__text\">Copy link to this calculation<\/span><\/button><span class=\"sr-only\" role=\"status\" id=\"copy-link-status\"><\/span><\/div><\/div><a href=\"#respond\" class=\"hidden transition-opacity duration-300 opacity-0 w-50 text-sm justify-center items-center gap-2 px-4 py-2 rounded bg-gray-200 text-gray-700 hover:bg-gray-300\" id=\"leave-comment\"><span class=\"icon icon-comments\" aria-hidden=\"true\"><\/span>Leave a Comment<\/a><\/form><\/section><section id=\"calc-reactions\" class=\"not-prose hidden my-12 bg-gradient-to-r from-primary-50 to-gray-50 border border-indigo-100 rounded-xl px-6 py-4 shadow-sm\" data-post=\"241\" aria-live=\"polite\" aria-labelledby=\"calc-reactions-title\"><p id=\"calc-reactions-title\" class=\"text-sm text-gray-500 text-center mb-2\">How did this result make you feel?<\/p><div role=\"group\" aria-labelledby=\"calc-reactions-title\" class=\"grid grid-cols-3 sm:flex sm:flex-row sm:justify-around gap-4 sm:items-center sm:flex-wrap\"><button type=\"button\" aria-pressed=\"false\" class=\"reaction-btn flex flex-col items-center gap-1 text-sm text-gray-700 hover:text-primary-600 cursor-pointer transition-transform hover:scale-105\" data-reaction=\"like\"><span class=\"reaction-count\" data-reaction-count=\"like\">0<\/span><span class=\"reaction text-3xl\" aria-hidden=\"true\">\ud83d\ude00 <\/span><span class=\"reaction-description font-medium\">Like <\/span><\/button><button type=\"button\" aria-pressed=\"false\" class=\"reaction-btn flex flex-col items-center gap-1 text-sm text-gray-700 hover:text-primary-600 cursor-pointer transition-transform hover:scale-105\" data-reaction=\"helpful\"><span class=\"reaction-count\" data-reaction-count=\"helpful\">0<\/span><span class=\"reaction text-3xl\" aria-hidden=\"true\">\ud83d\udca1 <\/span><span class=\"reaction-description font-medium\">Helpful <\/span><\/button><button type=\"button\" aria-pressed=\"false\" class=\"reaction-btn flex flex-col items-center gap-1 text-sm text-gray-700 hover:text-primary-600 cursor-pointer transition-transform hover:scale-105\" data-reaction=\"confused\"><span class=\"reaction-count\" data-reaction-count=\"confused\">0<\/span><span class=\"reaction text-3xl\" aria-hidden=\"true\">\ud83d\ude15 <\/span><span class=\"reaction-description font-medium\">Confused <\/span><\/button><button type=\"button\" aria-pressed=\"false\" class=\"reaction-btn flex flex-col items-center gap-1 text-sm text-gray-700 hover:text-primary-600 cursor-pointer transition-transform hover:scale-105\" data-reaction=\"disappointed\"><span class=\"reaction-count\" data-reaction-count=\"disappointed\">0<\/span><span class=\"reaction text-3xl\" aria-hidden=\"true\">\ud83d\ude1e <\/span><span class=\"reaction-description font-medium\">Disappointed <\/span><\/button><button type=\"button\" aria-pressed=\"false\" class=\"reaction-btn flex flex-col items-center gap-1 text-sm text-gray-700 hover:text-primary-600 cursor-pointer transition-transform hover:scale-105\" data-reaction=\"inaccurate\"><span class=\"reaction-count\" data-reaction-count=\"inaccurate\">0<\/span><span class=\"reaction text-3xl\" aria-hidden=\"true\">\u274c <\/span><span class=\"reaction-description font-medium\">Inaccurate <\/span><\/button><\/div><div id=\"reaction-message\" class=\"hidden mt-8 rounded-md border border-primary-100 bg-white\/50 backdrop-blur-sm px-4 py-2 text-sm text-center shadow-sm\"><\/div><\/section><div class=\"calcdash-ad not-prose calcdash-ad--calc_result calcdash-ad--in-article\"><ins class=\"adsbygoogle\" style=\"display:block\" data-ad-client=\"ca-pub-1721569815777345\" data-ad-slot=\"6317458308\" data-ad-layout=\"in-article\" data-ad-format=\"fluid\"><\/ins><script>(adsbygoogle = window.adsbygoogle || []).push({});<\/script><\/div>\n<style id=\"wpcoderpro-inline-1\">.formula-box {\r\n\tborder-bottom: none !important;\r\n}<\/style><section class=\"formula-box\" aria-labelledby=\"formula-title\">\r\n\t<div id=\"formula-title\" class=\"not-prose font-display mb-4\"><span class=\"icon icon-formula\" aria-hidden=\"true\"><\/span><h2>Compound Annual Growth Rate (CAGR) Formula<\/h2><\/div>\r\n\t<figure class=\"not-prose formula\">\r\n\t\t<figcaption class=\"formula-title\">Formula<\/figcaption>\r\n\t\t<div class=\"text-base text-gray-800\" id=\"formula\">\n\\[ \\text{CAGR} = \\left(\\frac{V_f}{V_i}\\right)^{\\frac{1}{n}} - 1 \\]\n<\/div>\r\n\t<\/figure>\r\n\t<\/p>\n<p><strong>Where:<\/strong><\/p>\n<ul>\n<li>\\(V_f\\) \u2014 final value of the investment at the end of the period<\/li>\n<li>\\(V_i\\) \u2014 initial value of the investment at the start of the period<\/li>\n<li>\\(n\\) \u2014 number of years in the period<\/li>\n<\/ul>\n<p>The formula gives the constant annual growth rate that would take the investment from \\(V_i\\) to \\(V_f\\) over \\(n\\) years, assuming all gains are reinvested and compound each year. Multiply the result by 100 to express it as a percentage.<\/p>\n<p>\r\n<\/section>\n<style id=\"wpcoderpro-inline-459\">.calculation-box {\r\n\tborder-bottom: none !important;\r\n}<\/style><section id=\"calculation\" class=\"calculation-box\" aria-labelledby=\"calculation-title\">\r\n\t<div id=\"calculation-title\" class=\"not-prose font-display\"><span class=\"icon icon-unordered-list\" aria-hidden=\"true\"><\/span><h2>Compound Annual Growth Rate \u2013 Calculation Example<\/h2><\/div>\r\n\r\n<\/p>\n<p><strong>Example:<\/strong> an investment grows from $1,000 to $2,000 over 5 years.<\/p>\n<p>\\[ \\text{CAGR} = \\left(\\frac{2000}{1000}\\right)^{\\frac{1}{5}} - 1 = 2^{0.2} - 1 \\approx 0.1487 \\]<\/p>\n<p><strong>Result:<\/strong> the Compound Annual Growth Rate is approximately <strong>14.87%<\/strong> per year. In other words, $1,000 compounding at 14.87% annually would double to $2,000 in 5 years.<\/p>\n<p>\n\r\n<\/section>\n<h2>How to use the calculator<\/h2>\n<ol>\n<li>Enter the <strong>Initial Value<\/strong> \u2014 the amount the investment was worth at the start of the period (default: $1,000).<\/li>\n<li>Enter the <strong>Final Value<\/strong> \u2014 the amount it was worth at the end of the period (default: $2,000).<\/li>\n<li>Enter the <strong>Number of Years<\/strong> the investment lasted (default: 5). The value must be at least 1.<\/li>\n<li>Read the <strong>Compound Annual Growth Rate<\/strong> in percent, rounded to three decimal places.<\/li>\n<\/ol>\n<h2>What is CAGR and why it matters<\/h2>\n<p>The Compound Annual Growth Rate (CAGR) is the mean annual growth rate of an investment over a period longer than one year, assuming profits are reinvested at the end of each year. It answers the question: \"At what steady yearly rate would this investment have grown from its starting value to its ending value?\"<\/p>\n<p>CAGR is more informative than a simple average of yearly returns. Investment values rarely grow at a constant pace \u2014 a portfolio might gain 30% one year and lose 10% the next. Averaging those annual numbers can seriously overstate or understate real performance. CAGR smooths out this volatility and gives a single, comparable figure that reflects the actual compounding path between the first and last value.<\/p>\n<p>This makes CAGR a standard tool for comparing investments of different lengths and sizes: two stocks over different periods, revenue growth of two companies, or the performance of a fund against a benchmark index. It is also useful for projecting future values, since you can apply the CAGR as an assumed growth rate in compound growth models. Note that intermediate fluctuations are invisible to CAGR \u2014 it only uses the starting and ending values, so two investments with the same CAGR can have very different risk profiles along the way.<\/p>\n<h2>Assumptions, limitations and practical tips<\/h2>\n<ul>\n<li><strong>Only endpoints matter:<\/strong> CAGR ignores everything between the first and last year. A smooth grower and a roller-coaster investment can share the same CAGR, so consider volatility and drawdowns separately when comparing options.<\/li>\n<li><strong>Full years:<\/strong> the formula assumes the period is measured in whole years. For fractional periods (e.g. 4.5 years), the result is an approximation of the annualized rate.<\/li>\n<li><strong>No cash flows:<\/strong> CAGR assumes a single lump sum at the start with no deposits or withdrawals during the period. If you added or removed money, use a money-weighted measure such as the internal rate of return instead.<\/li>\n<li><strong>Reinvestment assumption:<\/strong> gains are assumed to be reinvested and compounded annually. If returns were withdrawn, the actual growth of your wealth would differ.<\/li>\n<li><strong>Extrapolate with caution:<\/strong> a high historical CAGR is not a guarantee of future growth. Long-run averages tend to be more reliable than rates computed from short, volatile windows.<\/li>\n<li><strong>Past performance:<\/strong> CAGR is descriptive, not predictive \u2014 always pair it with risk measures before making decisions.<\/li>\n<\/ul>\n<p>To sanity-check how long a growth rate needs to double your money, try our <a href=\"https:\/\/wpcalc.com\/en\/finance\/rule-72\/\">Rule of 72 calculator<\/a> or the <a href=\"https:\/\/wpcalc.com\/en\/finance\/rule-70\/\">Rule of 70 calculator<\/a>. If you want to compare CAGR with an effective annual rate that accounts for more frequent compounding, see the <a href=\"https:\/\/wpcalc.com\/en\/finance\/annual-percentage-yield\/\">Annual Percentage Yield calculator<\/a>, or work out the compounding effect of regular savings with the <a href=\"https:\/\/wpcalc.com\/en\/finance\/reinvestment-plan-deposits\/\">Reinvestment Plan Deposits calculator<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Enter the initial value, final value and number of years to instantly calculate the Compound Annual Growth Rate (CAGR) \u2014 the smoothed annual return an investment would need to grow from start to finish with compounding.<\/p>\n","protected":false},"author":70,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[5],"tags":[25],"class_list":["post-241","post","type-post","status-publish","format-standard","hentry","category-finance","tag-interest"],"acf":[],"_links":{"self":[{"href":"https:\/\/wpcalc.com\/en\/wp-json\/wp\/v2\/posts\/241","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/wpcalc.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/wpcalc.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/wpcalc.com\/en\/wp-json\/wp\/v2\/users\/70"}],"replies":[{"embeddable":true,"href":"https:\/\/wpcalc.com\/en\/wp-json\/wp\/v2\/comments?post=241"}],"version-history":[{"count":6,"href":"https:\/\/wpcalc.com\/en\/wp-json\/wp\/v2\/posts\/241\/revisions"}],"predecessor-version":[{"id":66062,"href":"https:\/\/wpcalc.com\/en\/wp-json\/wp\/v2\/posts\/241\/revisions\/66062"}],"wp:attachment":[{"href":"https:\/\/wpcalc.com\/en\/wp-json\/wp\/v2\/media?parent=241"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/wpcalc.com\/en\/wp-json\/wp\/v2\/categories?post=241"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/wpcalc.com\/en\/wp-json\/wp\/v2\/tags?post=241"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}