CAGR Calculator
Calculate compound annual growth rate from a start value, end value and period or dates, or solve backwards for the end value or the years needed.
The interactive tool loads here when JavaScript runs.
About this toolWhat is the CAGR Calculator?
Compound annual growth rate (CAGR) is the single steady yearly rate that would turn a starting value into an ending value over a given period. The CAGR Calculator works it out from a beginning value, an ending value and a period entered either as years and months or as two dates. It also runs in reverse: give it a growth rate and it finds the ending value, or the number of years needed to get from one value to another.
Next to the CAGR it shows the total return, the growth multiple and the simple average return (total return divided by years), with a chart that puts the compound curve beside the straight line. An optional box takes a list of year-end values and compares the arithmetic average of the yearly returns with the CAGR, which is the comparison that most often misleads investors.
It works for anything that grows or shrinks: portfolio values, company revenue, user counts, house prices or population.
- CAGR from values and years, months or exact dates
- Reverse solving for the end value or the years needed
- Simple average return and growth multiple alongside the CAGR
- Chart of the compound curve against straight-line growth
- Arithmetic vs geometric comparison from a list of year-end values
- Formula panel, copy and share link
How to use the CAGR Calculator
- Pick what you want to find: CAGR, End value or Time needed.
- Enter the beginning value and, depending on the mode, the ending value or the growth rate.
- Enter the period as years and months, or switch to start and end dates for an exact day count.
- Read the result with the total return, simple average and growth multiple, and check the formula panel for the working.
- Optionally paste year-end values in the lower box to compare the average of yearly returns with the true compound rate.
Worked examples
Portfolio growth over five years
Input
Start 10,000, end 19,000, 5 years
Output
CAGR 13.70%; simple average 18.00%
The total return is 90%. Dividing by five years gives 18%, but 18% compounded for five years would produce about 22,878, not 19,000. The CAGR of 13.70% is the rate that lands exactly on 19,000.
Revenue growth for a company
Input
Start 1.2 million, end 3.1 million, 4 years
Output
CAGR 26.78%
This is how annual reports state multi-year growth. The underlying years may have been 50%, 10%, 35% and 15%, but the CAGR summarizes them as one rate.
Years to triple at 9%
Input
Time needed, start 1,000, end 3,000, 9%
Output
12 years 9 months (12.75 years)
The calculator solves ln(3) ÷ ln(1.09). It is the same idea as the rule of 72 for doubling, without the approximation.
Average of yearly returns vs CAGR
Input
Year-end values 100, 150, 75, 120
Output
Arithmetic average 20.00%; CAGR 6.27%
Yearly returns of +50%, -50% and +60% average 20%, yet the value only grew from 100 to 120 in three years. Big swings make the simple average a poor guide to what you actually earned.
Background and insight
The formula is CAGR = (End ÷ Start)^(1 ÷ years) − 1. It is a geometric mean of growth factors, which is why it is sometimes called the annualized return. Taking the nth root spreads the total growth evenly across the years and assumes everything is reinvested. With dates, the period is the actual number of days divided by 365.25, so 1 January 2020 to 1 January 2025 is 5.002 years rather than exactly 5.
CAGR is not the average of yearly returns. A value that rises 50% and then falls 50% ends at 75% of where it began, a CAGR of -13.4% a year, although the arithmetic average of +50% and -50% is zero. The arithmetic average is always at least as high as the geometric one, and the gap grows with volatility. Fund marketing that quotes an average annual return is often quoting the higher number.
CAGR also ignores money added or withdrawn along the way. It compares only two end points, so if you added savings during the period the CAGR overstates your actual investment return. For a portfolio with deposits and withdrawals, a money-weighted return (XIRR) or a time-weighted return is the right measure.
Common use cases
Comparing investments over different periods
Convert returns measured over 3, 7 and 12 years into one comparable yearly rate.
Business and revenue growth
Summarize multi-year growth in sales, customers or market size in pitch decks and annual reports.
Checking a fund's claimed return
Compare a quoted average annual return with the CAGR implied by the fund's start and end values.
Setting growth targets
Solve for the years needed to reach a target, or the value you will have if growth continues at a given rate.
Tips and limitations
- CAGR needs a positive starting value. If the start is zero or negative, a growth rate is not defined.
- An ending value of zero gives -100%: the investment was wiped out.
- Periods shorter than a year annualize the result, which can produce eye-catching numbers. A 10% gain in three months is a CAGR of 46%.
- CAGR hides the path. Two investments with the same CAGR can have very different drawdowns along the way.
- Use the Investment Returns Calculator rather than CAGR when cash was added or withdrawn during the period.
Frequently asked questions
What is the formula for CAGR?
CAGR = (Ending value ÷ Beginning value)^(1 ÷ number of years) − 1. For 10,000 growing to 19,000 in 5 years: 1.9^(0.2) − 1 = 0.1370, or 13.70% a year.
What is the difference between CAGR and average annual return?
The average annual return adds the yearly returns and divides by the count, while CAGR is the compound rate that connects the start and end values. CAGR is lower whenever returns vary, because losses hurt more than equal gains help. +50% then -50% averages 0% but has a CAGR of -13.4%.
How do I calculate CAGR with months or exact dates?
Convert the period to years. Years and months use years + months ÷ 12. Dates use the actual number of days divided by 365.25. The calculator does both, so 2 years 6 months is 2.5 years.
Can CAGR be negative?
Yes. If the ending value is below the starting value, CAGR is negative. Falling from 100 to 50 over 2 years is a CAGR of -29.3% a year.
What is a good CAGR for an investment?
It depends on the asset and the risk. Broad stock markets have historically compounded at high single digits a year over long periods, bonds and savings lower. Compare a CAGR with an alternative of similar risk over the same dates rather than with a fixed number.
Is CAGR the same as IRR?
Only when there is a single investment at the start and a single value at the end. With several cash flows in and out, IRR accounts for the timing of each one while CAGR only looks at the two end points.
Is there an in-depth guide to the CAGR Calculator?
Yes. “Time Value of Money: PV, FV, NPV, IRR, CAGR and ROI Explained” covers the background, how it works, common pitfalls and worked examples. Read the full guide.
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