## Step 1

#### Step

Divide the final value of the stock by the initial value of the stock. For example, if the stock started off being worth $120 and is now worth $145, you would divide $145 by $120 to get 1.20833.

## Step 2

#### Step

Divide 1 by the number of years the growth occurred over. For example, if it took three years to go form $120 to $145, you would divide 1 by 3 to get 0.3333.

## Step 3

#### Step

Raise the result from Step 1 to the result from Step 2. In this example, you would raise 1.20833 to the 0.3333 power to get 1.0651

## Step 4

#### Step

Take away 1 from the Step 3 result. In this example, you would take away 1 from 1.0651 to get 0.0651.

## Step 5

#### Step

Convert the result from Step 4 from a decimal to a percentage by multiplying by 100 to find the compound annual growth rate. Finishing the example, you would multiply 0.0651 by 100 to find the compound annual growth rate to be 6.51 percent.