CAGR Calculator

Find the compound annual growth rate between two values.

Beginning value

Ending value

Number of years

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CAGR

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How it works

A CAGR calculator finds the compound annual growth rate — the single steady yearly rate that would grow a starting value into an ending value over a given number of years, as if growth had been perfectly smooth. You enter the beginning value, the ending value and the number of years, and the tool returns the annualized rate as a percentage. CAGR is powerful because real growth is lumpy: revenue might jump 40 percent one year and fall 10 percent the next, and a simple average of those swings is misleading. CAGR cuts through the noise by asking what constant rate, compounded each year, would produce the same final result. That makes it the standard way to describe the growth of revenue, investments, user numbers, portfolios and whole markets, and to compare two things that grew over different time spans on equal terms. Investors quote it to summarise a fund's performance, founders use it to show a business's trajectory, and analysts rely on it to project forward. The formula raises the ratio of ending to beginning value to the power of one over the number of years, which reverses compounding to extract the per-year rate. Its honest limitation is that it hides volatility entirely — two investments with the same CAGR can have wildly different risk — so it describes the smoothed path rather than the bumpy reality, and is best read with that in mind.

Formula

CAGR = ((ending ÷ beginning) ^ (1 ÷ years) − 1) × 100

Dividing the ending value by the beginning value gives the total growth multiple over the whole period. Raising that multiple to the power of one divided by the number of years reverses the effect of compounding, extracting the constant annual rate that, applied year after year, reproduces the same final figure. Subtracting one converts the growth factor into a rate, and multiplying by 100 expresses it as a percentage. The result smooths uneven growth into a single comparable number.

Source:Standard financial (CAGR) formula

We review all our tools from time to time to ensure accuracy.

Worked example

Beginning value:100000Ending value:200000Number of years:5

CAGR = (200,000 ÷ 100,000)^(1/5) − 1 = 2^0.2 − 1 ≈ 0.1487 = 14.87% per year.

How to use this calculator

1
Enter your values
Enter beginning value, ending value and number of years.
2
Adjust the options
Fine-tune any options to match your situation.
3
Read your result
CAGR updates instantly as you type — no button to press.

Frequently asked questions

What is CAGR and why is it useful?

CAGR, the compound annual growth rate, is the constant yearly rate that would turn a starting value into an ending value over a set number of years. It is useful because it smooths out volatile, uneven growth into one comparable figure, letting you describe how fast something grew per year and compare investments or businesses that ran over different periods. It answers the question, if growth had been perfectly steady, what annual rate would have produced this result?

How is CAGR different from average growth rate?

A simple average adds each year's percentage change and divides by the number of years, which ignores compounding and can badly mislead. If a value rises 100 percent then falls 50 percent, the simple average suggests 25 percent growth, yet you actually ended exactly where you started — a true CAGR of zero. CAGR accounts for compounding by working from the beginning and ending values directly, so it reflects the real cumulative outcome rather than a distorted average of the swings.

What are the limitations of CAGR?

CAGR completely hides volatility and the path taken between the two endpoints. Two investments with identical CAGRs can have wildly different risk profiles — one steady, the other lurching through booms and crashes. It is also sensitive to the choice of start and end dates: picking an unusually low starting point or high ending point can flatter the rate. Always read CAGR alongside a measure of volatility and be wary of cherry-picked periods.

Can CAGR be negative?

Yes. If the ending value is lower than the beginning value, the growth multiple is less than one and the CAGR comes out negative, describing a steady annual rate of decline. A negative CAGR is perfectly valid and useful — it tells you how quickly a shrinking revenue line, portfolio or user base contracted on average each year. The calculation requires a positive beginning value and a positive ending value for the result to be meaningful.

What time period should I use for CAGR?

Use a period long enough to capture the genuine trend rather than a short-term spike, and be honest about your start and end points. Three to five years is common for business and investment analysis because it spans normal ups and downs. Beware of choosing dates that begin at an unusual trough or end at a peak, since that can dramatically inflate the rate. Consistent, representative endpoints make the resulting CAGR trustworthy and comparable.