WeVividWeVividCalculate the compound annual growth rate between two values.
CAGR = (Ending Value ÷ Beginning Value)^(1/years) − 1. It's the constant annual growth rate that would take the beginning value to the ending value over the given period — smoothing out any ups and downs along the way.
A simple average of yearly returns can overstate real growth because it ignores compounding and volatility. CAGR accounts for compounding, giving a more accurate single number for comparing investments over different periods.