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Compound Annual Growth Rate (CAGR) Calculator

What is Compound Annual Growth Rate (CAGR)?

The Compound Annual Growth Rate (CAGR) is a metric that represents the mean annual growth rate of an investment over a specified period of time longer than one year. It smooths out volatility and provides a more representative figure for growth compared to simple average growth rates. CAGR is particularly useful for comparing the performance of different investments, understanding the historical performance of a business, or forecasting future growth based on past trends.

The formula for CAGR is:

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

In this calculator:

  • Beginning Value: The initial value of your investment or metric at the start of the period.
  • Ending Value: The final value of your investment or metric at the end of the period.
  • Number of Years: The total number of years over which the growth occurred.

The result is expressed as a percentage, indicating the annualized rate at which your investment grew.

Example Calculation:

Let's say you invested $10,000 (Beginning Value) in a stock. After 5 years (Number of Years), its value has grown to $25,000 (Ending Value).

Using the CAGR formula:

CAGR = ($25,000 / $10,000)^(1 / 5) – 1

CAGR = (2.5)^(0.2) – 1

CAGR = 1.2011 – 1

CAGR = 0.2011 or 20.11%

This means your investment grew at an average annual rate of 20.11% over the 5-year period.

function calculateCAGR() { var beginningValue = parseFloat(document.getElementById("beginningValue").value); var endingValue = parseFloat(document.getElementById("endingValue").value); var numberOfYears = parseFloat(document.getElementById("numberOfYears").value); var resultDiv = document.getElementById("result"); if (isNaN(beginningValue) || isNaN(endingValue) || isNaN(numberOfYears) || beginningValue <= 0 || endingValue < 0 || numberOfYears <= 0) { resultDiv.innerHTML = "Please enter valid positive numbers for all fields. Beginning value must be greater than zero, and ending value must be non-negative."; return; } var cagr = Math.pow((endingValue / beginningValue), (1 / numberOfYears)) – 1; var formattedCAGR = (cagr * 100).toFixed(2); resultDiv.innerHTML = "The Compound Annual Growth Rate (CAGR) is: " + formattedCAGR + "%"; } .calculator-container { font-family: sans-serif; max-width: 600px; margin: 20px auto; padding: 20px; border: 1px solid #ddd; border-radius: 8px; background-color: #f9f9f9; } .calculator-container h2 { text-align: center; color: #333; margin-bottom: 20px; } .calculator-inputs { display: flex; flex-direction: column; gap: 15px; margin-bottom: 20px; } .input-group { display: flex; flex-direction: column; } .input-group label { margin-bottom: 5px; font-weight: bold; color: #555; } .input-group input[type="number"] { padding: 10px; border: 1px solid #ccc; border-radius: 4px; font-size: 1rem; } .calculator-inputs button { padding: 12px 20px; background-color: #007bff; color: white; border: none; border-radius: 4px; font-size: 1.1rem; cursor: pointer; transition: background-color 0.3s ease; } .calculator-inputs button:hover { background-color: #0056b3; } #result { margin-top: 20px; padding: 15px; border: 1px solid #e0e0e0; border-radius: 4px; background-color: #fff; text-align: center; font-size: 1.1rem; color: #333; } .calculator-explanation { margin-top: 30px; border-top: 1px solid #eee; padding-top: 20px; color: #666; line-height: 1.6; } .calculator-explanation h3 { color: #444; margin-bottom: 10px; } .calculator-explanation p, .calculator-explanation ul { margin-bottom: 15px; } .calculator-explanation ul { padding-left: 20px; } .calculator-explanation li { margin-bottom: 5px; }

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