# Compound Annual Growth Rate (CAGR) Formula and Calculation.

The compound annual growth rate (CAGR) is the mean annual growth rate of an investment over a specified period of time longer than one year.

To calculate the compound annual growth rate, you divide the value of an investment at the end of the period by its value at the beginning of the period, and then take the resultant number and raise it to the power of 1/n, where n equals the number of years in the period. This gives you a growth rate that is not influenced by the timing of your investment.

For example, if you had an investment that was worth \$10,000 at the beginning of Year 1, and \$11,000 at the end of Year 2, your CAGR would be:

CAGR = ((11000/10000)^(1/2))-1 = 0.10, or 10%

The CAGR is a useful measure because it smooths out the volatility of an investment and gives you a single number that you can use to compare different investments.

However, it is important to remember that the CAGR is not a measure of the investment's profitability, but rather its rate of growth. How is growth rate calculated? The growth rate is calculated by taking the current period's earnings and dividing it by the previous period's earnings. The resulting number is then multiplied by 100 to get a percentage.

##### What is the difference between CAGR and growth rate?

CAGR is the acronym for Compound Annual Growth Rate. It is the mean annual growth rate of an investment over a specified period of time longer than one year.

Growth rate is the rate of increase in the value of an investment over a specified period of time. How do you convert CAGR to annual growth? CAGR, or compound annual growth rate, is a measure of the rate of return of an investment over time. To convert CAGR to annual growth, simply divide the CAGR by the number of years over which the investment was made. For example, if an investment made \$100 over a five-year period and had a CAGR of 10%, the annual growth rate would be 2%. How do you calculate annual growth rate? The annual growth rate is calculated by dividing the current year's sales by the previous year's sales and subtracting 1. How do you calculate growth rate of sheets? There are a few different ways to calculate the growth rate of sheets. One common method is to take the average growth rate over a certain period of time. Another method is to calculate the compound annual growth rate (CAGR).

To calculate the average growth rate, you would first find the total growth over the period of time that you are interested in. Then, you would divide that number by the number of years in the period.

To calculate the CAGR, you would first find the growth rate for each year over the period of time that you are interested in. Then, you would take the average of those growth rates.