The average compound annual return between a starting and an ending value.
CAGR = (VF ÷ VI)^(1 ÷ n) − 1
What each letter means
- VI: Starting value
- VF: Ending value
- n: Years
An example
With VI = €10,000, VF = €12,100, n = 2 years: Compound annual return = 10%.