CAGR Calculator
Find the compound annual growth rate between a starting and ending value.
Formula
About this calculator
A CAGR calculator finds the single steady annual rate at which an investment or business metric grew from its starting value to its ending value over a number of years. Compound annual growth rate is the standard way to describe growth over time because it smooths out the bumps: real returns are rarely the same every year, and CAGR answers what constant rate would have produced the same end result.
The formula divides the ending value by the beginning value, takes the root corresponding to the number of years, and subtracts one. Grow 10,000 dollars into 18,000 over five years and the CAGR is about 12.5 percent — meaning a steady 12.5 percent every year would have delivered the same outcome, even though the actual year-to-year path was probably far more uneven.
CAGR's great strength is comparability. Because it collapses any growth story into one annualized figure, it lets you line up investments, revenue trends or user-growth numbers that ran over different time spans and different amounts. It's the metric analysts reach for when reporting how fast a company's sales or a portfolio has grown across several years.
Its limitation is the flip side of its strength: by assuming smooth growth, CAGR hides volatility entirely. Two investments with the same CAGR can have wildly different risk profiles. Use it to summarise and compare overall growth, but pair it with a look at the year-by-year figures when the smoothness of the ride matters as much as the destination.
Frequently asked questions
How do you calculate CAGR?
Divide the ending value by the beginning value, raise the result to the power of one divided by the number of years, subtract one and multiply by 100 to get a percentage.
What is the difference between CAGR and ROI?
ROI is the total return over the whole period; CAGR expresses that growth as a smoothed annual rate. CAGR is better for comparing investments held over different time spans.
Does CAGR account for volatility?
No. CAGR assumes smooth, steady growth and deliberately hides year-to-year swings. Two investments with the same CAGR can differ greatly in risk, so review the annual figures too.
Can CAGR be negative?
Yes. If the ending value is lower than the beginning value, CAGR is negative, showing the average annual rate of decline over the period.
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⚠️ CAGR is calculated from the values you enter and describes smoothed historical growth, not a prediction. It is a simplified measure for comparison, not financial advice.