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Glossary Finance

CAGR

CAGR is the constant yearly growth rate that would take a value from its starting amount to its ending amount over a period.

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In more detail

The formula is (end / start)^(1/years) − 1. An investment that grows from $10,000 to $16,000 in 5 years has a CAGR of 9.86%. It smooths out ups and downs, so it hides volatility.

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Average Return Calculator

Calculate the arithmetic mean and the geometric mean (annualized/CAGR) return for a series of up to five periodic percentage returns.

See also

  • Glossary Return on investment (ROI)
    Return on investment (ROI) is the gain or loss on an investment as a percentage of what was invested.
  • Glossary Compound interest
    Compound interest is interest calculated on the original amount plus all the interest already added, so growth builds on itself.
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