Measure an investment's annual growth
Turn a start and end value into the one smoothed rate that connects them — CAGR.
Tools used in this guide
The job
Revenue went from 2.1M to 3.4M in four years — was that fast? Growth that jumps year to year can't be described by one of the yearly numbers; CAGR is the constant rate that would carry the start to the end exactly.
Start, end, years
Enter the starting value, the ending value, and the elapsed years. The result is (end ÷ start)^(1 ÷ years) − 1 — plus total growth and the value multiplied year over year.
Worked example
2.1 → 3.4 over 4 years: ratio 1.6190, CAGR ≈ 12.8 %. The same money compounding at that exact rate for 4 years lands back on 3.4 — by construction.
Where it stops
CAGR is a smoothing fiction: a +50 % year and a −20 % year can share a CAGR with two flat years. It says nothing about risk or the path between endpoints.