About the CAGR Calculator
This CAGR calculator converts growth over several years into a single annual rate. Enter a beginning value, an ending value and the number of years between them, and it returns the compound annual growth rate — the steady yearly rate that would take you from the first number to the second.
Investors use CAGR to compare funds, stocks or portfolios held for different lengths of time; business owners use it for revenue, customers or profit growth. Because it smooths out the ups and downs, it is far more meaningful than dividing total growth by the number of years.
CAGR ignores the path taken and any deposits or withdrawals along the way. If money was added or removed during the period, use the XIRR or IRR calculator instead. Fractional years (for example 3.5) are supported.
With the default inputs, the cagr is 20.11%. Change any value above to recalculate instantly.
How to use the cagr calculator
- 1Enter the value at the start of the period.
- 2Enter the value at the end of the period.
- 3Enter how many years passed between the two (decimals allowed).
- 4Read the CAGR and compare it with other investments over different time frames.
Formula and method
CAGR is the geometric mean growth rate: divide the ending value by the beginning value, take the n-th root (where n is the number of years) and subtract one. It answers the question “what constant yearly rate would produce this result?”.
Total growth is simply EV ÷ BV − 1 and the multiple is EV ÷ BV. Doubling time uses ln 2 ÷ ln(1 + CAGR), the exact version of the rule of 72. The calculation assumes no money was added or withdrawn between the two dates.
- EV
- Ending value
- BV
- Beginning value
- n
- Number of years (can be fractional)
Worked examples
$10,000 grows to $25,000 in 5 years
The investment multiplied 2.5 times. The fifth root of 2.5 is about 1.2011, so the compound annual growth rate is 20.11% — much lower than the 30% you would get by dividing the 150% total gain by five.
A loss: $250,000 falls to $180,000 over 4 years
The portfolio lost 28% in total. Spread over four years with compounding, that is an average loss of about 7.88% per year.
Revenue from $1.2M to $3.5M in 7 years
Revenue grew 2.92 times. The seventh root of that multiple gives a compound annual growth rate of about 16.52%.
Frequently asked questions
What is a good CAGR?+
It depends on the asset. Broad US stock indexes have historically delivered roughly 10% a year before inflation over long periods, while high-quality bonds have returned far less. For a business, a good revenue CAGR depends on its size and industry.
How is CAGR different from average annual return?+
The arithmetic average adds yearly returns and divides by the number of years, which overstates growth when returns vary. CAGR is the geometric average — the constant rate that actually links the start and end values.
Can CAGR be negative?+
Yes. If the ending value is lower than the beginning value, CAGR is negative and represents the average compound yearly loss over the period.
Does CAGR work if I added money along the way?+
No. Deposits and withdrawals distort CAGR because it only looks at the first and last values. Use an IRR or XIRR calculator, which accounts for the timing and size of every cash flow.
How do I calculate CAGR in Excel?+
Use =(End/Start)^(1/Years)-1, or the built-in =RRI(Years, Start, End). Format the cell as a percentage to see the annual rate.
Results are estimates for educational purposes and are not financial advice. Rates, fees and terms vary — confirm with your lender or a licensed advisor before making decisions.