How to Calculate CAGR
Calculate the Compound Annual Growth Rate (CAGR) of an investment over a period of time.
The Formula
((finalValue / initialValue)^(1 / years) - 1) * 100The cagr formula uses the mathematical relationship: ((finalValue / initialValue)^(1 / years) - 1) * 100. Each variable in the formula represents a measurable quantity that affects the final result.
Step-by-Step Method
- 1Identify all input values needed for the cagr calculation.
- 2Substitute your known values into the formula: ((finalValue / initialValue)^(1 / years) - 1) * 100.
- 3Perform the arithmetic operations in the correct order (PEMDAS/BODMAS).
- 4Check that your result has the correct units and is within a reasonable range.
- 5Verify using the interactive CAGR Calculator to confirm your answer.
Related Topics
cagrgrowth ratereturnsinvestmentfinance
Use the Interactive Calculator
Skip the manual math — get instant results with our free CAGR calculator.