CAGR Calculator
Find the steady yearly growth rate that turns a beginning value into an ending value over a number of years, or work out the ending value when you already know the CAGR.
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How to use CAGR Calculator
- Choose Find CAGR or Find ending value.
- Enter the beginning value and the number of years.
- Enter the ending value, or the CAGR if you are solving for the ending value.
- Read the result together with the total growth and growth multiple.
What CAGR measures
Compound annual growth rate describes how fast something grew each year on average, assuming growth compounded. It is used for investments, business revenue, user numbers, population and any quantity measured at two points in time. Its main benefit is that it makes different time spans comparable: a rise from 100 to 200 in 5 years and a rise from 100 to 150 in 3 years can be compared fairly as yearly rates.
Simple averages of yearly percentage changes are misleading because growth compounds. CAGR fixes this by using the start value, the end value and the time between them only.
Formulas and worked example
CAGR = (E ÷ B)^(1 ÷ n) − 1, where B is the beginning value, E the ending value and n the number of years. To go the other way, E = B × (1 + CAGR)^n.
Example: 10,000 grows to 25,000 over 8 years. The ratio is 2.5, the eighth root of 2.5 is about 1.1214, so CAGR is about 12.14 percent. Check: 10,000 growing at 10 percent for 8 years gives 10,000 × 1.1^8 = 21,435.89, which matches the ending-value mode.
Tips and limits
Always state the period when quoting a CAGR, since a figure with no dates can hide a lucky start or end point. When comparing two investments, make sure both use the same start and end dates, and remember that a very short period can make a CAGR look dramatic without meaning much.
- CAGR ignores the ups and downs between the two dates, so it says nothing about risk.
- It does not include deposits or withdrawals during the period; use a return method that handles cash flows if you made any.
- Past growth is not a promise of future growth.
- Inflation, fees and taxes are not included.
- This is an estimate and not financial advice.
Why use this cagr calculator tool
- Two modes. Solve the rate, or solve the final value from a rate.
- Extra context. Shows total growth and the growth multiple.
- Fractional years. Enter periods such as 2.5 years.
- Private. No data leaves your device.
Frequently asked questions
What is the CAGR formula?
CAGR = (Ending value ÷ Beginning value)^(1 ÷ years) − 1. For 10,000 growing to 25,000 in 8 years, CAGR = 2.5^(1/8) − 1 ≈ 12.14 percent.
Does CAGR mean the investment grew that much every year?
No. CAGR is a smoothed average. The actual path may have had big gains and losses. It only describes the steady rate that would give the same start and end values.
Why does it reject zero or negative values?
The formula takes a root of the ratio of end to start, which is not defined for zero or negative values. Enter positive numbers for both.
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