Geometric vs. arithmetic?

Geometric (CAGR) accounts for compounding and is the correct measure for investment returns.

Geometric (CAGR) accounts for compounding and is the correct measure for investment returns.

Average Return Calculator

Investment

Calculate the geometric (annualized) average return from a series of yearly returns.

Beginning Value

Ending Value

Years

$$\text{CAGR} \;=\; \left(\frac{V_{\text{end}}}{V_{\text{begin}}}\right)^{1/t} - 1$$

Where

CAGRcompound annual growth rate

V_endending value

V_beginstarting value

tyears