Finance
CAGR
Smoothed annual growth over multiple periods.
Formula
(Ending / Beginning)^(1 / Years) − 1 × 100
Required inputs
- Beginning value
- Ending value
- Years
Worked example
₹1,00,000 to ₹1,21,000 over 2 years is 10% CAGR.
How to interpret it
It smooths changes; it does not describe each year’s actual path.
Common mistake
Use a positive beginning value and a meaningful period.
When to use it
Compare multi-year business or investment growth.