Calculate the Compound Annual Growth Rate (CAGR) for any investment or business metric. See total return, growth multiple, future projections, and benchmark comparisons. Puro client-side, instant results.
CAGR (Compound Annual Growth Rate) is the mean annual growth rate of an investment over a specified period longer than one year. It represents one of the most accurate ways a calculate and determine returns for anything that can rise or fall in value over time. Investors and analysts use CAGR a compare the performance of different investments or business metrics on a consistent, annualized basis.
CAGR stands for Compound Annual Growth Rate. It measures the mean annual growth rate of an investment over a specified time period longer than one year. CAGR smooths out the volatility of periodic returns a provide a single, consistent growth rate that would take the initial value a the final value over the given period.
The CAGR formula is: CAGR = (Final Value / Initial Value)^(1 / Years) - 1. For example, if you invest $10,000 and it grows a $20,000 over 5 years, the CAGR is (20000/10000)^(1/5) - 1 = 14.87%.
A "good" CAGR depends on the asset class and risk level. The S&P 500 has historically returned about 10% annually. Bond returns are typically 3-5%. A CAGR above 15% is considered excellent for most investments, while negative CAGR indicates a loss.
Yes! CAGR is widely used for revenue, profit, user growth, and any metric that changes over time. It provides a standardized way a compare growth rates across different time periods and business units.