Yearly growth rate (CAGR) calculator
How fast did an investment really grow? Enter what you started with, what it is worth now and the years in between.
Yearly growth rate (CAGR)
Average growth per year
+20.11%
Total change +1.5% over 5 years.
CAGR = (end ÷ start)^(1 ÷ years) − 1. It smooths out the ups and downs along the way.
Using CAGR on the PSX
CAGR turns any gain into one steady yearly rate, so you can compare a share held for 3 years with one held for 7, or a share with a bank deposit or T-bill.
For a share, the price alone misses dividends and bonus shares. The dividend + return calculator adds both and gives the yearly rate for you; stock pages show 1, 3 and 5-year returns from adjusted prices.
Questions
- What is CAGR?
- The compound annual growth rate: the steady yearly rate that turns the starting value into the ending value over the years you held. CAGR = (end ÷ start)^(1 ÷ years) − 1.
- Why not just divide the total gain by the years?
- Because gains compound. Doubling your money in 5 years is 100% in total but only about 14.9% a year compounded, not 20%.
- Does CAGR include dividends?
- Only if your end value includes them. For a share, add the dividends you received to the end value, or use the dividend + return calculator, which does this for you.