CAGR Calculator

Calculate the compound annual growth rate between a beginning and ending value, and see why it differs from average returns.

CAGR Calculator

Calculate compound annual growth rate from beginning value, ending value, and years.

Beginning value

Ending value

Years

years

Compound annual growth rate

12.47%

Results are estimates for informational purposes only.

How to use this calculator

What CAGR measures

Compound annual growth rate (CAGR) is the steady yearly rate that would take an investment, a revenue figure, or any other value from its starting point to its ending point over a set number of years. It turns an uneven path into one comparable number.

An investment that grows from $10,000 to $18,000 in 5 years has a total return of 80%, but its CAGR is 12.47% a year. Dividing 80% by 5 years gives 16%, which overstates yearly growth because it ignores compounding.

CAGR vs average annual return

CAGR differs from the simple average of yearly returns whenever returns vary. If an investment gains 50% one year and loses 50% the next, the average return is 0%, but $10,000 ends at $7,500, a CAGR of −13.4%. CAGR reflects what actually happened to the money, which is why it is the standard for comparing funds, stocks, and business growth.

The flip side is that CAGR hides volatility. Two investments with the same CAGR can have very different paths, so look at year-by-year results as well when risk matters.

Using CAGR well

Compare CAGRs over the same period. A 5-year CAGR and a 10-year CAGR cover different market conditions, and the start and end dates can change the result a lot: measuring from a market low makes growth look stronger.

For business metrics, CAGR works well for revenue, users, or customers over several years. For an investment account with regular deposits, CAGR on the starting and ending balances overstates performance, because part of the growth came from new money rather than returns.

You can also review Compound Interest Calculator and Investment Growth Calculator to compare scenarios.

Formula

CAGR = (ending value ÷ beginning value)^(1 ÷ years) − 1
Total growth = ending value ÷ beginning value − 1

Example: $10,000 to $18,000 in 5 years

Growth multiple: $18,000 ÷ $10,000 = 1.8 (80% total growth).
Take the 5th root: 1.8^(1/5) ≈ 1.1247.
Subtract 1: CAGR = 12.47% a year.
Check: $10,000 × 1.1247^5 ≈ $18,000.

CAGR examples

Each row shows a beginning value, an ending value, and the years between them.

Beginning value	Ending value	Years	Compound annual growth rate
$10,000	$18,000	5 years	12.47%
$10,000	$25,000	10 years	9.6%
$10,000	$50,000	20 years	8.38%
$100,000	$250,000	8 years	12.14%
$200,000	$300,000	1 years	50%
$10,000	$8,000	3 years	-7.17%

Frequently asked questions

What is a good CAGR?

It depends on the asset and the risk. Broad US stock indexes have historically returned roughly 10% a year before inflation over long periods, while savings and high-quality bonds have returned much less. For a business, revenue CAGR is judged against its industry and stage.

Can CAGR be negative?

Yes. A value that shrinks has a negative CAGR. Falling from $10,000 to $8,000 over 3 years is a CAGR of −7.17%.

How is CAGR different from ROI?

ROI is the total percentage gain over the whole holding period, regardless of how long it took. CAGR converts that gain into a yearly rate. An 80% ROI earned over 5 years is a 12.47% CAGR; the same 80% over 10 years is only 6.05%.

Can I use CAGR for periods shorter than a year?

This calculator works in whole years. The formula itself accepts fractions of a year, but annualizing a short period can exaggerate results: a 10% gain in 3 months annualizes to more than 46%, which is unlikely to repeat.