How to Calculate Cagr
What is Cagr?
CAGR (Compound Annual Growth Rate) represents the constant annual growth rate that would produce the same result as actual growth over a period. It smooths volatility to give a single comparable number.
Step-by-Step Guide
- 1CAGR = (End Value / Start Value)^(1 / Years) − 1
- 2Convert to percentage by multiplying by 100
Worked Examples
Input
$1,000 → $1,800 over 5 years
Result
CAGR = 12.47%
(1800/1000)^(1/5)−1 = 0.1247
Input
Revenue $2M → $5M over 4 years
Result
CAGR = 25.74%
Strong growth