CAGR CALCULATOR

Compound Annual Growth Rate calculator







This is a mathematical calculation only, not investment advice.


CAGR (Compound Annual Growth Rate) is the constant yearly growth rate that would take a value from its starting point to its ending point over a given number of years, if it had grown at the same rate every year. It's a smoothed average, not the actual year-by-year growth — those can vary widely and still produce the same CAGR.

CAGR formula: CAGR equals open parenthesis Vf over Vi close parenthesis to the power of 1 over n, minus 1

Example
An investment grows from $10,000 to $16,105 over 5 years. What is the CAGR?
CAGR = (16105 / 10000)^(1/5) - 1 = (1.6105)^0.2 - 1 = 1.10 - 1 = 0.10
The CAGR is 10% per year.



Example
A small business's annual revenue grows from $200,000 to $291,700 over 4 years. What is the CAGR?
CAGR = (291700 / 200000)^(1/4) - 1 = (1.4585)^0.25 - 1 = 1.10 - 1 = 0.10
The CAGR is 10% per year.

Example
A savings account grows from $5,000 to $5,304.50 over 2 years. What is the CAGR?
CAGR = (5304.50 / 5000)^(1/2) - 1 = (1.0609)^0.5 - 1 = 1.03 - 1 = 0.03
The CAGR is 3% per year.

When to use this calculator

Use CAGR when you want a single smoothed growth rate over multiple years, rather than the actual year-to-year figures (which can go up and down while still averaging out to the same CAGR). For a simple percentage change between just two values with no time dimension, use the percentage change calculator instead.

Frequently asked questions

Is CAGR the same as the average annual growth rate?
No. A simple average of yearly percentage changes can overstate growth because of compounding — see why you can't average growth rates directly.

Can CAGR be negative?
Yes, if the ending value is lower than the starting value, CAGR will be negative, representing a compounded decline.

Does CAGR account for volatility along the way?
No, CAGR only looks at the start and end points. To measure how much a value fluctuated in between, see the volatility calculator. Related: why you can't average growth rates directly and percentage change calculator.