CAGR Calculator: Compound Annual Growth Rate
Summary Response
"CAGR is the ending value divided by the starting value, raised to the power of one over the number of years, minus one. Growing from AED 1,000,000 to AED 2,000,000 over three years is a CAGR of 25.99%."
Using CAGR Correctly
CAGR smooths volatility into a single rate. It describes the path only if growth was steady, which it rarely is.
It is undefined for a start value of zero or below, so it cannot describe growth from a standing start.
Two businesses with identical CAGR can have very different risk profiles; always read it alongside the year-by-year series.
Frequently Asked Questions
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