CAGR Calculator
Calculate Compound Annual Growth Rate, total return, absolute growth and estimated yearly compounded values instantly.
Calculate Compound Annual Growth Rate
Enter the beginning value, ending value and number of years.
The initial investment, revenue, value or starting amount.
The final value at the end of the selected time period.
Enter the total duration between beginning and ending values.
Quick Example
If a value grows from $10,000 to $18,000 over 5 years, the CAGR is approximately 12.47% per year.
Your Result
CAGR Summary
Compound Annual Growth Rate
Enter your values to calculate CAGR.
Total Return
Absolute Growth
Growth Multiple
Duration
Formula Used
CAGR = (Ending Value ÷ Beginning Value)1 ÷ Years − 1
Multiply the decimal result by 100 to express CAGR as a percentage.
Note: CAGR is a smoothed annualized growth rate. It does not show year-to-year volatility and should not be interpreted as a guaranteed future return.
Growth Projection
Estimated Compounded Values
This table shows a smooth compounded path based on the calculated CAGR.
| Year | Estimated Value | Growth from Start |
|---|
How It Works
Calculate CAGR in 3 Simple Steps
Find the annualized compounded growth rate without manual calculations.
Enter Beginning Value
Add the starting investment, revenue, business value or other initial amount.
Add Ending Value & Years
Enter the final value and total number of years in the measurement period.
Review CAGR
See CAGR, total return, absolute growth, growth multiple and estimated yearly values.
CAGR Formula
How Is CAGR Calculated?
CAGR converts total growth over multiple years into a compounded annualized rate.
Compound Annual Growth Rate Formula
CAGR = [(Ending Value ÷ Beginning Value)1 ÷ Years − 1] × 100
Beginning Value
The starting value at the beginning of the period.
Ending Value
The final value at the end of the period.
Years
The total duration of the measurement period.
Common Uses
What Can CAGR Measure?
Investments
Annualize growth between beginning and ending investment values.
Business Revenue
Measure annualized revenue growth across multiple years.
Sales Growth
Compare starting and ending sales over a longer period.
Market Growth
Estimate annualized growth in users, market size or other metrics.
CAGR Guide
What Is a CAGR Calculator?
A CAGR Calculator is an online tool that calculates the Compound Annual Growth Rate between a beginning value and an ending value over a specified number of years. CAGR expresses multi-year growth as a single annualized compounded rate.
It can be used to compare growth in investments, business revenue, sales, users, market size and other positive numerical values measured over time.
What Does CAGR Mean?
CAGR stands for Compound Annual Growth Rate. It represents the constant annual rate that would mathematically transform a beginning value into an ending value over the selected number of years, assuming compounding.
CAGR is useful because total percentage growth alone does not show the annualized pace of growth. A value may increase significantly over a long period, but the annualized compounded rate provides a different perspective on that change.
CAGR Calculation Example
Suppose a business metric increases from 10,000 to 18,000 over 5 years. The CAGR formula divides the ending value by the beginning value, raises the result to the power of one divided by 5, and subtracts one.
Example
Beginning Value = 10,000
Ending Value = 18,000
Number of Years = 5
CAGR ≈ 12.47%
This means that a constant compounded annual growth rate of approximately 12.47% would mathematically connect the starting value of 10,000 with the ending value of 18,000 over five years.
CAGR vs Total Return
CAGR and total return describe growth differently. Total return measures the overall percentage change from the beginning value to the ending value. CAGR converts that multi-year change into an annualized compounded rate.
| Metric | Main Focus | Simple Meaning |
|---|---|---|
| CAGR | Annualized compounded growth | Smoothed yearly growth rate |
| Total Return | Overall percentage change | Total growth across the full period |
| Absolute Growth | Numerical difference | Ending value minus beginning value |
CAGR vs Average Annual Growth Rate
CAGR should not be confused with a simple arithmetic average of annual growth rates. CAGR accounts for compounding between the beginning and ending values. A simple average adds annual percentage changes and divides by the number of observations.
The two calculations can produce different results, especially when annual growth rates vary significantly. CAGR is often useful when the goal is to express a multi-year beginning-to-ending change as one annualized compounded rate.
Can CAGR Be Negative?
Yes. CAGR can be negative when the ending value is lower than the beginning value. A negative CAGR indicates an annualized compounded decline across the selected period.
Negative CAGR Example
If a value falls from 20,000 to 15,000 over several years, the calculated CAGR will be negative because the ending value is below the beginning value.
Advantages of CAGR
CAGR provides a compact way to summarize growth over multiple years. It can make it easier to compare different growth periods, business metrics or investments when each has a clear beginning value, ending value and duration.
It is also useful for communicating long-term growth in a single percentage figure rather than relying only on a total percentage increase.
Limitations of CAGR
CAGR is a smoothed rate. It does not show what happened in each individual year between the beginning and ending values. Actual growth may have been volatile, irregular or negative during some years.
CAGR also does not predict future performance. A strong historical CAGR does not guarantee that the same growth rate will continue.
Important Note
Use CAGR alongside other relevant financial, operational and risk information. This calculator provides mathematical estimates and is not investment, accounting or financial advice.
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FAQ
CAGR Calculator FAQs
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