What this calculator does
CAGR is the constant annual rate that would take a starting value to an ending value over a given period. Real growth is never that smooth, but the smoothed figure is what makes different investments, revenue lines and populations comparable on a single number.
It deliberately ignores the path taken. Two businesses growing from $50,000 to $90,000 over five years have the same CAGR whether one grew steadily and the other collapsed and recovered. That is a feature when comparing outcomes and a limitation when assessing risk.
The formula
Dividing the ending value by the beginning value gives the total growth multiple. Taking the nth root of that multiple, where n is the number of years, gives the constant annual rate that produces it.
| Term | Meaning |
|---|---|
| CAGR | The smoothed constant annual growth rate. |
| Begin | The value at the start of the period. |
| End | The value at the end. |
| n | The number of years between the two. |
The inputs explained
| Field | What to enter |
|---|---|
| Beginning value ($) | The starting value. |
| Ending value ($) | The ending value. |
| Number of years | The number of years between them. Count the elapsed years, not the number of data points: 2020 to 2025 is five years, not six. |
When to use it
Measuring investment performance
Enter the value at purchase and today, and the years held. The CAGR is directly comparable with any index or benchmark quoted on the same basis.
Tracking business growth
Revenue, users or subscribers at two points in time. CAGR smooths out one exceptional year and gives a figure that can be quoted honestly.
Projecting forward
The calculator extends the same rate for a further identical period. That is a useful sanity check: if the projection looks implausible, the historical rate probably was not sustainable.
Comparing unlike things
A property, a share portfolio and a savings account all reduce to one annual percentage, which is the only fair way to rank them.
Worked examples
Every figure in the tables below is produced by this page’s own calculator at build time, so the numbers and the tool always agree. Select any row to load that scenario.
CAGR from $50,000 to different ending values
A $50,000 starting value across a five-year period, at various ending values.
| Ending value | CAGR | Total growth | After another 5 years |
|---|---|---|---|
| $40,000 | -4.36% | -20.0% | $32,000.00 |
| $60,000 | 3.71% | 20.0% | $72,000.00 |
| $75,000 | 8.45% | 50.0% | $112,500.00 |
| $90,000 | 12.5% | 80.0% | $162,000.00 |
| $125,000 | 20.1% | 150.0% | $312,500.00 |
| $200,000 | 32.0% | 300.0% | $800,000.00 |
The same doubling over different periods
An identical doubling, achieved over different numbers of years.
| Years taken | CAGR | Total growth |
|---|---|---|
| 2 years | 41.4% | 100.0% |
| 3 years | 26.0% | 100.0% |
| 5 years | 14.9% | 100.0% |
| 7 years | 10.4% | 100.0% |
| 10 years | 7.18% | 100.0% |
| 15 years | 4.73% | 100.0% |
Questions
What is the difference between CAGR and average annual return?
A simple average of yearly returns overstates growth when returns vary, because losses hurt more than equivalent gains help. CAGR is the geometric average and reflects what actually happened to the money.
Can CAGR be negative?
Yes, whenever the ending value is below the beginning value. The result is the constant annual rate of decline.
Does CAGR account for contributions along the way?
No. It compares two values only. If money was added or withdrawn during the period, CAGR will misattribute those flows to growth: use an internal rate of return instead.
How many years should I enter?
The elapsed time between the two values. From the end of 2020 to the end of 2025 is five years. Counting the number of annual data points instead is the most common error and understates the rate.
For returns including income and fees, use the ROI calculator. To project a rate forward with contributions, see compound interest.