# CAGR Calculator

Calculate Compound Annual Growth Rate (CAGR)

### Understanding CAGR: A Simple Explanation

The Compound Annual Growth Rate (CAGR) is a useful tool to measure how much an investment grows, on average, each year over a certain period. It’s especially helpful when you want to get a clear idea of how much your investment has increased annually, even if the growth varied from year to year.

### How to Calculate CAGR?

### To find the CAGR, you need two main pieces of information:

**Starting Value**: The value of your investment at the beginning of the period.**Ending Value**: The value of your investment at the end of the period.- With these values, you can calculate the average yearly growth rate.

### Why Use CAGR?

CAGR helps investors understand how an investment has grown on average per year, especially when the growth isn’t consistent. It smooths out any ups and downs over the years to show you a simple, clear rate of growth.

### Example of How to Calculate CAGR

Imagine you invested $10,000 in a stock, and after 5 years, it grew to $15,000. To calculate the CAGR:

**Starting Value**= $10,000**Ending Value**= $15,000**Number of Years**= 5

The CAGR for this investment would be around 8.45% per year. This means, on average, your investment grew by 8.45% each year over those 5 years.

### Conclusion

CAGR is a simple yet powerful way to understand how your investments have grown annually, on average. By knowing how to calculate and interpret CAGR, you can make better decisions about your investments and track their performance over time. It’s a must-know concept for anyone wanting to measure investment growth effectively.