CAGR Calculator
Find the compound annual growth rate from a starting value, an ending value, and a number of years.
Enter a starting value, an ending value, and the number of years.
How to use the CAGR calculator
Enter the starting value, the ending value, and the number of years between them. The compound annual growth rate appears at once, along with the total growth over the whole period for context.
CAGR is the steady yearly rate that would turn the start into the end. If you only want the plain rise or fall between two figures without spreading it over years, the percentage change calculator does that.
What CAGR actually measures
Real growth is bumpy. One year is up 30 percent, the next is down 10. CAGR smooths that into a single yearly rate, as if the value grew by the same percentage every year. So $1,000 growing to $2,000 over five years is a CAGR of about 14.87 percent.
That makes it easy to compare investments of different lengths on equal terms. It does not show the ups and downs along the way, only the smoothed average. To see how a steady rate builds a balance year by year, the compound interest calculator shows the full path.
The formula behind it
CAGR is the ending value divided by the starting value, raised to the power of one over the years, minus one. The division gives the total growth multiple, and the root spreads it evenly across each year. The result is shown as a percentage.
Because the formula divides by the start and takes a root over the years, both of those must be above zero. The ending value can be lower than the start, which gives a negative CAGR for a loss. For a measure of return on a single investment, the investment ROI calculator covers that.
Where CAGR is useful
Investors use it to compare funds, stocks, or a whole portfolio over different spans. Business owners track revenue or user growth across a few years. It turns two numbers and a time span into one rate you can line up against another.
Treat it as a summary, not a forecast. Past CAGR does not promise the same rate ahead. To compare two unrelated figures as a plain spread rather than a growth rate, the percentage difference calculator is the right tool.
Frequently asked questions
- How is CAGR calculated?
- Divide the ending value by the starting value, raise the result to the power of one divided by the number of years, then subtract one. For example, $1,000 to $2,000 over five years is about 14.87 percent a year.
- What is a good CAGR?
- It depends on the asset and the period. For broad stock market returns, a long-run CAGR in the high single digits is common. Compare a CAGR against a relevant benchmark rather than a fixed target.
- Can CAGR be negative?
- Yes. If the ending value is lower than the starting value, the CAGR is negative, which shows an average yearly loss. The tool handles this and shows the negative rate.
- How is CAGR different from average return?
- A simple average of yearly returns ignores compounding and can overstate growth. CAGR accounts for compounding, so it reflects the actual start-to-end change spread evenly across the years.
- Why must the starting value be above zero?
- The formula divides by the starting value and takes a root over the years, so both must be positive. A zero or negative start has no defined growth rate, so the tool waits for valid inputs.