Compound Annual Growth Rate (CAGR) Calculator

Find the constant annual growth rate that connects a beginning value to an ending value over a specified number of years.

Use the same unit for both values, such as dollars, revenue, or users.
Decimal periods are allowed; for example, enter 2.5 for two and a half years.

What compound annual growth rate tells you

CAGR expresses multi-year growth as one compounded annual rate. It is useful for comparing investments, revenue, users, or other positive-valued measures across periods of different lengths.

CAGR formula

CAGR = (Ending value / Beginning value)1 / years − 1

The calculator multiplies the decimal result by 100 to display a percentage. The beginning value must be greater than zero. An ending value of zero gives a CAGR of −100%.

Example: $10,000 grows to $18,000 in 5 years

The total return is 80%, but that is the change across the entire five-year period. Applying the CAGR formula gives approximately 12.475% per year:

CAGR = ($18,000 / $10,000)1 / 5 − 1 = 12.475%

CAGR versus total return

Total return measures the full percentage change from beginning to end. CAGR annualizes that same change using compounding, which makes periods of different lengths easier to compare. CAGR is not the arithmetic average of individual yearly returns.

Important limitations

  • CAGR uses only the beginning value, ending value, and elapsed time.
  • It hides volatility and does not describe the path between the endpoints.
  • Deposits or withdrawals during the period require a cash-flow-aware return measure such as IRR or XIRR.
  • Investment comparisons should treat dividends, fees, taxes, and inflation consistently.
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