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CAGR Calculator

Turn a starting value, an ending value and a number of years into one smooth annual growth rate.

Inputs
CAGR resultCalculated
CAGR20.1124% per year
Formula
CAGR(ending value / beginning value) ^ (1 / n) - 1
Inputs
  Beginning value   10,000.00
  Ending value      25,000.00
  n   years         5
Working
Ratio25,000.00 / 10,000.00 = 2.5
1 / n1 / 5 = 0.2
2.5 ^ 0.21.20112443
CAGR1.20112443 - 1 = 0.20112443
Results
  Compound annual growth rate    20.1124%
  Total change over the period   150.00%
  Absolute change                15,000.00
  Growth multiple                2.5x
  Years to double at this rate   3.78
Runs locally in your browser

About the CAGR Calculator

Compound annual growth rate answers a narrow question well: at what steady yearly rate would something have to grow to travel from where it began to where it ended? Revenue that climbed from 10,000 to 25,000 across five years has a CAGR of 20.1124 percent, even if the actual path included a flat year and a spike. That smoothing is the point when comparing two investments or two product lines over the same span.

The calculation takes the ratio of the two values, raises it to the power of one divided by the number of years and subtracts one. All three steps appear in the output, so 2.5 raised to 0.2 giving 1.20112443 is visible rather than hidden. A doubling time is included as a bonus, computed from the logarithm rather than the rough rule of 72, which at this rate means the value doubles every 3.78 years.

Two caveats matter. CAGR hides volatility completely, so a wild ride and a gentle climb with the same endpoints look identical, and it says nothing about money added or withdrawn along the way. For a savings plan with regular deposits, the Compound Interest Calculator models contributions properly. If you know the rate and want the ending value instead, run the sum forward in the Appreciation Calculator.

How to use

  1. Enter the beginning value at the start of the period.
  2. Enter the ending value at the end of it.
  3. Set how many years separate them. Half years such as 3.5 are allowed.
  4. Read the annual rate, and use the total change line to sanity check it.

Common questions

What is the CAGR formula?
CAGR = (ending value / beginning value) ^ (1 / years) - 1. Multiply by 100 to express it as a percentage.
Can CAGR be negative?
Yes. If the ending value is lower than the beginning value the rate comes out below zero, showing the average yearly decline.
Why does CAGR differ from the average of my yearly returns?
A simple average ignores compounding and is pulled upward by volatility. CAGR is a geometric mean, so it reflects the actual money at the end.
Does it handle periods shorter than a year?
Yes. Enter a fraction such as 0.5 for six months and the exponent adjusts, though short periods annualise into large and unreliable rates.