5 Year Compound Annual Growth Rate Calculator

The 5-Year Compound Annual Growth Rate (CAGR) is a measure of annualized growth over a 5-year period. It calculates the constant rate at which an investment or value must grow each year to reach its current value from its initial value. It helps assess the average annual growth rate while considering the effects of compounding.

5 Year Compound Annual Growth Rate Calculator

Enter the initial value and final value:







Initial ValueFinal Value5-Year CAGR
$1,000$1,5008.43%
$10,000$15,0008.43%
$100,000$150,0008.43%
$1,000,000$1,500,0008.43%

FAQs


1. How do you calculate 5-year compound annual growth rate (CAGR)?

  • To calculate a 5-year CAGR, use the formula: CAGR = [(Ending Value / Beginning Value)^(1/5) - 1] * 100

2. How do you calculate CAGR on a calculator?

  • On a calculator, enter the ending value, divide by the beginning value, raise the result to the power of (1/n), where “n” is the number of years, subtract 1, and then multiply by 100 to get the CAGR.

3. How do you calculate 5-year average growth rate?

  • The 5-year average growth rate is calculated by taking the average of the annual growth rates over the 5-year period. Add the annual growth rates and divide by 5.

4. What does 5% CAGR mean?

  • A 5% CAGR means that, on average, an investment or value has grown by 5% annually over a specified period.

5. Is there a CAGR formula in Excel?

  • Yes, you can use the RATE function in Excel to calculate CAGR. For example, =RATE(5,,-1000,3000) calculates the CAGR for five years with an initial value of -$1,000 and a final value of $3,000.

6. How do I calculate CAGR for 5 years in Excel?

  • You can use the RATE function in Excel. Enter the number of years (5), leave the guess value blank (“”), and provide the initial and final values.

7. What is the formula for CAGR for dummies?

  • The CAGR formula is: CAGR = [(Ending Value / Beginning Value)^(1/n) - 1] * 100

8. What is the difference between growth rate and CAGR?

  • The growth rate is a general term for the rate of increase, while CAGR specifically calculates the compounded annual growth rate, considering the effect of compounding.

9. How do you calculate CAGR in Excel with an example?

  • In Excel, you can use the RATE function. For example, if you have initial value -$1,000 and final value $3,000 over 5 years, you can use =RATE(5,,-1000,3000) to calculate the CAGR.
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10. How to calculate average compound annual growth rate in Excel? – To calculate the average CAGR in Excel, you can first calculate the CAGR for each year, then sum them up and divide by the number of years.

11. Why is CAGR better than average? – CAGR is often considered better than the average because it accounts for compounding, providing a more accurate representation of growth over time.

12. What is a good 5-year CAGR for an industry? – A good 5-year CAGR varies by industry, but a rate exceeding the industry average is typically considered good.

13. Is a CAGR of 5% good? – A CAGR of 5% can be considered good, depending on the context and industry. It indicates moderate growth.

14. How do you calculate the annual growth rate? – The annual growth rate can be calculated using the formula: Annual Growth Rate = ((New Value - Old Value) / Old Value) * 100

15. How do you convert CAGR to annual growth rate? – To convert CAGR to an annual growth rate, you can use the formula: Annual Growth Rate = (1 + CAGR)^(1/n) - 1, where “n” is the number of years.

16. What is a good CAGR? – A good CAGR varies by context, but a higher CAGR is generally preferred as it indicates stronger growth.

17. What is CAGR formula used for? – The CAGR formula is used to calculate the annualized growth rate of an investment or value over a specified period, considering compounding.

18. Is CAGR the same as annual return? – CAGR is similar to annual return but specifically accounts for compounding effects, providing a more accurate measure of growth.

19. How do you calculate growth rate over multiple years? – To calculate growth rate over multiple years, you can use the growth rate formula for each year and then average the individual growth rates.

20. Is CAGR the same as average annual growth? – CAGR is not the same as average annual growth. CAGR accounts for compounding, while average annual growth calculates simple average growth.

21. How do you calculate growth rate in Excel? – In Excel, you can calculate growth rate using the formula: =((New Value - Old Value) / Old Value) * 100

22. What is the formula for growth in Excel? – The formula for growth in Excel is: =((New Value - Old Value) / Old Value) * 100

23. Why is CAGR misleading? – CAGR can be misleading when growth is not consistent over time or when there are significant fluctuations.

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24. Why is average annual return misleading? – Average annual return can be misleading when it doesn’t account for compounding or when there are significant variations in annual returns.

25. What is a good 5-year growth rate? – A good 5-year growth rate varies by context and industry, but exceeding the industry average is often considered good.

26. What is Tesla’s CAGR? – Tesla’s historical CAGR has varied, but it has experienced rapid growth in recent years.

27. What is a good ROI over 5 years? – A good ROI (Return on Investment) over 5 years varies by investment type, but exceeding the market average is often considered good.

28. Does CAGR include dividends? – CAGR can include dividends if they are reinvested into the investment, but it may not account for taxes or fees associated with dividends.

29. What is the CAGR of the S&P 500? – The historical CAGR of the S&P 500 has varied, but it is often cited as around 7-10% over long periods.

30. What is Microsoft’s CAGR for 5 years? – Microsoft’s historical CAGR for 5 years can vary depending on the specific period in consideration.

31. Is CAGR the same as compound interest? – CAGR and compound interest are related concepts, but they are not the same. CAGR specifically measures growth, while compound interest focuses on the accrual of interest on an investment.

32. How many periods should I take CAGR? – The number of periods for calculating CAGR depends on the specific context and the available data. Common periods include 1-year, 3-year, 5-year, and longer.

33. Is CAGR higher than IRR? – CAGR and IRR (Internal Rate of Return) are different metrics used for different purposes, and one may be higher than the other depending on the context.

34. Can you use CAGR for forecasting? – CAGR can provide a basis for forecasting future growth, but it should be used in conjunction with other factors and analysis for accurate forecasting.

35. What is an example of a CAGR? – An example of a CAGR is calculating the annualized growth rate of a stock’s value from $100 to $200 over 5 years.

36. How do you calculate compound rate? – To calculate compound rate, you can use the formula for CAGR: CAGR = [(Ending Value / Beginning Value)^(1/n) - 1] * 100, where “n” is the number of years.

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