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How to calculate CAGR

CAGR is the steady yearly rate that turns a starting value into an ending value. On a financial calculator, it’s just i.

Problem

An investment grew from $15,000 to $27,500 over 6 years. What was its compound annual growth rate?

Keystrokes

  1. fFINx≷y
    0.00

    Start clean.

  2. 6n
    6.00

    Six years.

  3. 15000CHSPV
    −15,000.00

    The starting value, paid in.

  4. 27500FV
    27,500.00

    The ending value, received.

  5. i
    10.63

    The yearly growth rate.

Answer

The CAGR is 10.63% a year.

Why it works

CAGR solves FV = PV × (1 + i)ⁿ for i. The financial keys do exactly that, with PMT left at zero by fFINx≷y.

The two values need opposite signs. With both positive, the calculator can’t find a rate and shows an error.

Without the financial keys

The same answer comes from the formula with yˣ: 27500ENTER15000÷61/xyˣ1−100×.

Questions

Can I use months instead of years?

Yes, but i then comes out per month. Use n in months, then multiply i by 12 for a nominal yearly rate.

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