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How to calculate Compound annual growth (CAGR)

The Compound annual growth (CAGR) formula, with plain worked examples you can check yourself.

Compound annual growth (CAGR) = ((End ÷ Start)^(1 ÷ n) − 1) × 100

The result is a percentage (%).

Worked examples

Start = 1000 · End = 1331 · n = 3Compound annual growth (CAGR) = 10%
Start = 1000 · End = 1331 · n = 3Compound annual growth (CAGR) = 10%
Start = 1000 · End = 3375 · n = 3Compound annual growth (CAGR) = 50%

How to use it

  1. Write down the values for each letter in the formula.
  2. Do the brackets first, then divide or multiply.
  3. Multiply by 100 to show the answer as a percentage.
  4. Compare the answer with last period or with a competitor to see if it is good or bad.

This formula belongs to Investing & Returns.

Related terms

DividendBondHedgingArbitrageLeverageAsset allocation

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